HAL Shares Hit One-Month High After Sukhoi Engine Deal

Shares of Hindustan Aeronautics Ltd. rose to a one-month high in early trade on Tuesday after the government approved a proposal for procurement of 240 aero-engines (AL-31FP) for the Indian Air Force's Su-30 MKI aircraft from the company at a cost of over Rs 26,000 crore.

The engines, which will be produced at HAL's Koraput division, are expected to start being delivered after a year and will be supplied over an eight-year period. The engines will have an indigenous content of over 54%, a boost from previous models due to the indigenisation of key components, according to a release by the Ministry of Defence.

The Su-30 MKI is a critical asset in the IAF's arsenal, known for its power and strategic importance. The new engines will ensure the fleet's continued operational readiness and enhance India's defence capabilities, it said.

Su-30 MKI is a twinjet multirole air superiority fighter aircraft developed by Russia's Sukhoi and built under license by HAL for IAF.

Last week, Hindustan Aeronautics and SAFHAL Helicopter Engines signed an airframer contract to develop, manufacture, jointly design, supply and support a high-power engine 'Aravalli'.

The new generation high-power engine will be utilised for the Indian multi-role helicopter, or IMRH and the deck-based multi-role helicopter, or DBMRH, which is being designed and developed by HAL.

The company's order book stood at Rs 94,000 crore as on March 31, 2024. The Sukhoi deal will bolster order backlog to Rs 1.2 lakh crore, according to Antique Stock Broking Pvt. The brokerage sees strong revenue visibility for HAL of 3.8 times its trailing revenue.