HAL Declines 6.34% as Market Dips; Eyes Major Private Sector Push in ₹62,500 Cr LCH Project

Shares of HAL Limited experienced a notable decline on Monday, April 7, 2025, against a backdrop of considerable market turbulence. The stock opened significantly lower, down 6.34%. This downturn occurred within a volatile market environment.

Major Development of the Company

State-owned aerospace and defence major Hindustan Aeronautics Limited (HAL) is going to outsource work worth around ₹25,000 crore to private sector companies. This comes in the wake of the signing of the recent mega order worth ₹62,500 crore for 156 Light Combat Helicopters (LCH) for the Indian Army and Air Force. The contract was signed between the Defence Ministry and HAL after the Cabinet Committee on Security cleared it.

HAL's move to bring its manufacturing organisation at the time of the project is similar to what has been done in its other project of Light Combat Aircraft( LCA). LCA programme also involved outsourcing various stages of production, with various private sector companies including Larsen and Toubro and Vem Technologies being entrusted with production of different parts of the aircraft like fuselage, wings, etc.

HAL, the defence officials said, also plans to give about 40 percent of the work share in the ₹62,500 crore LCH project to the private industry. Tendering for the private-sector participation in the LCH project is expected to start soon. "By taking this initiative, it is hoped to further expand the defence industrial ecosystem in the country at all levels and promote self-reliance through reduced dependence on foreign sources," officials said.

The manufacture of the Light Combat Helicopters will be done by HAL facilities in Bengaluru and Tumkur, both in Karnataka.

HAL being the largest aerospace company of the country has a very healthy order book of more than ₹2 lakh crore. The firm is also looking at further orders totaling over ₹70,000 crore in the coming quarter. The current ₹2 lakh crore order book includes contracts for supplying 12 Su-30 fighter jets as well as 83 LCA jets, of which 10 are trainer aircraft.

HAL's existing order book of ₹1,840 billion (about 6 times trailing twelve months revenue) offers strong revenue visibility over the near-to-medium term, the brokerage added. Additionally, the order book pipeline is expected to remain robust with FY 2026 estimate order book (including Repair and Overhaul orders) of more than ₹1,400 billion expected. According to ICICI Securities, the execution of the Tejas Mk-1A programme will also be positive for other companies in the supply chain including BEL, Astra Microwave and Dynamatic Technologies.

This move forms part of HAL's long-­term goal of stepping up its partnership with the private sector to promote self-­reliance in all of its projects. Now, the tendering process for Strategic Partnership will be concluded in the near future after which private players will be involved in this crucial 'Light Combat Helicopter' project.

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