Hindustan Aeronautics Limited ($HAL)

Ladies and gentlemen, good day, and welcome to the Hindustan Aeronautics Limited Q4 FY '26 Earnings Conference Call hosted by Ambit Capital. [Operator Instructions] I now hand the conference over to Mr. Sameer Thakur from Ambit Capital. Thank you, and over to you, sir.

Good afternoon, everyone. On behalf of Ambit Capital, I thank the management of Hindustan Aeronautics Limited for the opportunity to host their Q4 FY '26 Earnings Conference Call. To discuss the results, I am pleased to welcome Shri Ravi Kota, Chairman and Managing Director; Shri Barenya Senapati, Director, Finance and CFO; Shri Shailesh Bansal, Company Secretary. Now I invite Shri Ravi Kota to take us through the key highlights of the quarter, post which we will open up for Q&A. Thank you, and over to you, sir.

Thank you very much. Good afternoon, ladies and gentlemen. At the outset, I would like to thank all of you for taking the time to join us today and for your continued confidence in HAL. This interaction is particularly significant for me personally as I assume charge as Chairman and Managing Director of HAL on 1st May 2026. It's a huge responsibility to lead one of the India's most strategic aerospace and defense organization at a time when Indian aerospace and defense ecosystem is undergoing transformational growth. Today, I have with me Dr. Barenya Senapati, Director Finance and CFO; and Shri Shailesh Bansal, Company Secretary, to answer any question that you may have. We have declared our results for FY 2025, '26 yesterday and posted the results in our website as well as filed with the stock exchanges. Hope you had opportunity to see the same. I would like to highlight some of the physical milestones that we achieved during 2025 and '26 before discussing the financial numbers. Some of the major achievements during the year are production capacity of 8 LCA Mk1A per annum established with inauguration of the third production line at HAL Nashik in presence of honorable Raksha Mantri on 17th October 2025. Indigenously designed and developed, ALH Dhruv NG took [indiscernible] flight in presence of Honorable Minister of Civil Aviation on 30th December 2025. [indiscernible] first series production Hindustan Turbo Trainer, HTT-40 aircraft successfully completed on 24th October 2025. HAL received the certification of indigenous manufacturing of Shakti civil engine from the DGCA on 30 December 2025. As part of the diversification, HAL signed the SSLV technology transfer agreement with ISRO IN-SPACe and NSIL on 10th September 2025, securing a nonexclusive license to manufacture the SSLV. For production of commuter aircraft, SJ-100 in India, HAL and Public Joint Stock Company, United Aircraft Corporation Russia, signed an MOU on 27th October 2025. HAL contributed to ISRO's successful launch of LVM3 machine on 2nd November 2025 and the LVM3-M6 machine that deployed the massive BlueBird Block-2 satellite on 24th December 2025 by all-time supply of space working hardware. To position HAL as a key player in global aerospace supply chain, HAL signed an agreement with Safran Aircraft Engines in June 2025 for the industrialization and production of rotating parts of LEAP engines, which powers the single-line civil aircraft such as Airbus A320neo, Boeing 737 MAX, et cetera. Indigenization success stories, advanced manufacturing capabilities and opportunities for MSME partnership showcased during the National Defense Industry Conclave, 19 to 20 March 2026 inaugurated by Honorable Raksha Mantri. Now I would like to discuss a few financial highlights for FY 2025, '26. We have achieved revenue from operations of INR 33,050 crores for financial year 2025, 26 in comparison base -- in comparison to INR 30,981 crores in financial year 2024, '25. This is an increase of 7% despite the global aerospace supply chain disruptions. Deliveries of ALH helicopters, AL-35FP engines, RD33 engines and ROH revenues helped offset delays in Tejas Mk1A and [indiscernible] programs. Our diversified portfolio has enabled balanced growth across segments. Our manufacturing revenue was INR 9,227 crores and ROH revenue was at INR 20,524 crores -- sorry. The manufacturing revenue increased from INR 7,057 crores to INR 9,227 crores with the help of delivery of ALH helicopters, AL-31FP engines and RD33 engines. The manufacturing revenues are expected to grow further on commencement of delivery of LCA Mk1A and [indiscernible] during the current year. During the year, we also achieved export revenue of [ INR 401 crores ] as against INR 400 crores of the previous year. This profitability remained robust during the year. Our EBITDA grew by 11% to reach INR 13,472 crores as against INR 12,168 crores of previous year. Operating EBITDA was at 30% of the revenue and was maintained at that level versus previous year. We reported a profit before tax of INR 12,112 crores as against INR 10,820 crores reported in the previous year. This is an increase of 12%. Coming to CapEx and R&D expenditure. We are continuously investing in our future through investment in building capabilities in the form of CapEx and in our future capabilities through R&D expenditure. During the year, we have crossed INR 2,386 crores as CapEx and INR 2,794 crores in R&D activities, which is around 8% to 4% of our revenue. Considering the major orders in hand, envisaging new orders and to ensure timely delivery to the customers, production capacity ramped up of the following major projects, namely LCA and [indiscernible] manufacturing at Bangalore and Nashik plants. LCA manufacturing at Bangalore and Tumakuru plants will focus -- will be the focus areas going forward. Additionally, we plan to develop manufacturing infrastructure for LCA Mk2, GE-414 engine and IMRH engines, infrastructure facilities for manufacturing SSLV, indigenization of aero engine projects, et cetera, along with facilities to support design and development activities for IMRH and other projects. We plan to invest around INR 12,000 crores in these projects by 2030. During the year, HAL has filed 223 IPR applications, which made cumulative number of 2,842 IPRs filed by company. Further, 84 IPRs have been granted during the year, taking cumulative IPRs held by organization to 1,227. Coming to order book. The order book of the company further improved to INR 2,54,538 crores against this previous year order book position of INR 1,89,302 crores as on 1st April 2025. And after liquidation of current year turnover of INR 31,792 crores. During the year, the fresh order received by the company were INR 97,028 crores, which includes the manufacturing orders of INR 69,668 crores and ROH orders of INR 26,539 crores. Major orders that include contracts for supply of 97 LCA Mk1A [indiscernible]. Quantity 6 ALH [ Mk-III ] [indiscernible]. Quantity 8 DO-228 to [indiscernible]. Quantity 10 ALH Dhruv NG to [indiscernible]. Quantity 2 Hindustan-228 to Guayana. The order pipeline looks even more promising with additional anticipated contracts of 143 ALH for Army, IAF SU-30 upgrade, upgrade of 40 DO-228, et cetera, are at various stages of approval. In total, we expect to receive orders of INR 90,000 crores, including the orders during the next 2 years. I would like to conclude and say that these results represent not just numbers on the balance sheet, but the culmination of dedicated efforts by our 24,000-plus employees, the trust of our Armed Forces and collective aspirations of a nation-building self-reliance in aerospace and defense. While this past year has presented significant challenges, it has also demonstrated HAL's resilience and our unwavering commitment to national security. Thank you, and [Foreign Language].

You can now start the question-and-answer session.

[Operator Instructions] First question is from the line of Atul Tiwari from JPMorgan.

Sir, what is the status of the start of delivery of LCA Mk1A to Air Force? When we can expect Air Force to accept the first slot? That is the first question. And what is the revenue growth and EBITDA margin guidance for FY '27?

Thank you, Mr. Atul. This is the CMD, Chair. See, as you are aware that we have 6 engines received from GE now and all these aircraft clients. There are a few testings still undergoing now, and we are going to discuss the same with Air Force in the coming months. So we are hoping to resolve everything and stabilize by August or September. And I'll just hand over to Director of Finance to give the guidance.

As far as revenue growth is there, we are hopeful that we will be near a double-digit growth in the current financial year, '26, '27. And the EBITDA margin always we have maintained around 30%, 31%, and it will be maintained.

Okay, sir. And sir, because these time lines of LCA delivery have gotten stretched multiple times. Is there a risk that the delivery schedule, it's still well beyond other than possibly only in the very far end of FY '27?

No. This time, because we have committed more engines in this year. So with that, we are hopeful now that by August, September, we should be able to start the delivery.

But since the delay in the delivery of the first 6 aircraft appears to be beyond engine because those aircrafts are ready. And based on media reports, and we don't know the reality, it looks like that there is some software issue, et cetera. So could you throw some light what is holding it up? And how big the issue is? And could -- and what are you doing to resolve those issues? I'm asking it because in the market, it is causing fair [indiscernible] in the Investor Day. And there are question marks whether any aircrafts can be delivered even in FY '27?

See, the testing, whatever has been done is only for refining whatever has been already tested. So this is a continuous process. So since there's more technicalities involved in that, I will restrict to tell that we are moving in a very positive direction. And we are hopeful that by August, September, we should be able to start the deliveries.

The next question is from the line of Amit Dixit from Goldman Sachs. As there is no response from the line, we'll move to the next speaker -- question, which is from the line of Umesh Raut from Nomura.

Congrats for a strong operational performance in fourth quarter. Sir, my first question is again on LCA program. If you can articulate this in a better way, what went wrong in terms of execution delays apart from engine supply from GE? And what is exactly left in terms of testing where we can get confident of deliveries by probably second quarter in this financial year?

Sir, thank you very much. Again, as I told Mr. Atul, these -- the refinements, whatever -- because I cannot get into the details of it. So these refinements, we need to meet certain parameters. So these requirements is a result of design and development projects, it has to go through the iterations. So we are going through iterations of that. And we will -- we are confident because now, it is going in the right direction. The results are very promising, but still some [ requirements ] are required, so which [ retail ] is working on that. We are confident that we will be able to meet the September deadline.

Got it, sir. Sir, if I understand correctly, we are doing a lot of these platforms after design and development for the first time in terms of execution. And indigenization as per se, for us, in terms of scope has also increased. So what are our action plans in terms of mitigating these execution risk in terms of other programs, whether those are in terms of, say, HTT-40 or LCH on the helicopter side? So what are our plans in terms of mitigating these execution risks? And at the same time, if you can guide us in terms of execution time lines for other larger programs like LCH and [ SU-30 Mk1 ] aircraft?

[indiscernible] one thing is the other programs, first of all, whatever risk mitigation, what you are telling, what we are trying to do is we are trying to identify more than one vendor for the supply of items, whether it is indigenous or from foreign source so that we have a [ larger net ] available for us. That is one thing. As far as SU-30 or the HTT-40 is concerned, all the purchase orders required is already placed on the vendors. So now we are in the receipt of these items, even though it is slow because of the geopolitical situation. We will still be able to maintain the deliveries of the other platform, what you mentioned in time because all the structures, everything, we are going as per plan.

To supplement CMD, there is a little bit difference between [ LCA and LCH. LCH ] is our own design product. HTT-40 is our own design product. And LCA, it's a joint production between [indiscernible]. So we are confident these helicopters, LCH and HTT-40 is on the right track. And as for the contract, it will be delivered. LCH, hopefully, [indiscernible] contract, '27, '28 and we will be able to deliver in time.

Got it, sir. Sir, my second question is pertaining to supply chain risk that we have in the business where if I look at beyond probably engine supply from GE, in case of other programs, are you seeing any kind of supply disruption, whether it is for radars or engines for that matter in programs like Sukhoi, LCH helicopters, HTT-40 aircrafts. Any kind of supply chain risk over there where vendors are delaying any major components to you?

Yes. If you see now, the current global situation, whatever is there. I don't -- I will not say disruption, but slowness is there. There is a slowness. But when we have discussions with them and now with their -- we have started discussing with their Tier 1, Tier 2 vendors also. We are getting confident that we should be able to get the items. Maybe minor delays will be there, but we are confident that it will reach within the time required for me to complete the per platform and delivery because the current situation is like that. Some delay is expected from a few places.

Got it, sir. Sir, my last question is on the guidance side. If I look at your guidance for revenue growth of double digit, if you can quantify relatively in a better way, where exactly this growth is expected to come by, how much increase over and above 92 billion 93 billion that we reported on manufacturing side we can expect in '27?

When I say double digit, in the current year, if you see, it is around 7% growth. So double-digit means you cannot expect significant like 15% to 20%. Yes, it will be in the range of 10% to 12%, minimum.

Got it. But particularly in case of manufacturing, where we have seen about 30% year-on-year growth?

Manufacturing, 30%, if you see, is hopefully, our LCA program and HTT-40, if we are able to deliver, then manufacturing, if you see that in the composition, manufacturing sale will play a dominant role.

The next question is from the line of [indiscernible] from ICICI Prudential Asset Management.

If you can highlight on the upcoming programs like Tejas Mk2, when do you expect the ground testing and prototype rollout of Tejas Mk2 program? And also on the other future programs like [indiscernible]. Any update on that expected over [indiscernible]?

Sorry, what is the second program you talked about?

[indiscernible] aircraft and all these other programs beyond that way? Maybe first on the Tejas Mk2, when do you expect that to develop?

Yes. The assembly of these structures are going on for Tejas Mk2. So we are expecting this in the last quarter of this year for the rollout of Mk2. Again, these are all joint design between us and [indiscernible]. So there are a few things, which has to be resolved by them also. So we are expecting that by March, we should be able to roll out Mk2. But other than that, as you said, unmanned vehicles, we are doing a rotary UAV, which is the rotor is already built, and we are doing the ground test now. And the CATS Warrior barrier, which we did ground run last year, it was successful. Now we are actually building the actual UAV now. That, we are expecting next year, not this year. Next year, maybe it will have the flight.

And sir, second question is on the Mk1A platform. In our guidance, how many Mk1As have you considered?

Actually, what is happening now this time, we have received 6 engines. So GE is committing another 20 engines. I think 20 [indiscernible] selling, but not the exact number what is selling. So we are expecting around 20.

The next question is from the line of Mohit Pandey from Citigroup.

Sir, first question is on the ROH revenue. The growth seems to have come off compared to what we used to guide earlier. So any color there, sir? That would be question number one.

No. If you see, we have actually, there will be a little bit -- [indiscernible] has come down by around INR 500 crores to INR 600 crores in the current financial year as compared to the last financial year. But the repair and overall, it is almost at the same level because we have not added any new platform to our repair and overall activities. It's all the same platforms like ALH and maybe when Sukhoi [indiscernible], when LCA, when the LCA will come up for repair and overall, maybe next year and more of ALH, if it comes, then only it will be around -- a significant increase in repair and overall. We may have in next financial year. Otherwise, if you see, platforms are same and then at the same level only, except the escalation part and other things might be there.

Understood, sir. Sir, secondly, on margins. So your guidance of 30%, 31% margins with manufacturing share increasing and with some supply chain disruptions that you highlighted, input costs going up. So how do you plan to deliver similar margins at 30%, 31%? Are there cost pass-through process with regards to commodities in new contracts with end users?

I didn't get you. Maybe?

No. But these disruptions, whatever or the delay or see, delay, what I told you in the beginning, this purchase order is already placed.

Before '26, '27 already, we have the inventory. Yes, the inventories are there and only some components, it may come or with the purchase orders has already been placed 1 year back or 2 years back. So there will not be any cost increase as such for '26, '27 cost of production. I don't think -- they're not going to increase. And as the purchase orders have been placed for 83 LCA, long back, inventories are purchased and we have built up the inventory. So we'll get that advantage. And then we have negotiations and all those things.

And we have already produced aircraft like if you have seen, around more than 30-plus aircraft is already produced, for example, LCA is produced. All the items are [ fitted ] and it is -- testing ground has also happened.

And as far as [indiscernible] accelerated, this is already mitigated, it is factored in the contract. So we are not affected. So our cost for cost of production will not increase.

Understood, sir. Sir, and from, say, next year perspective, when the older inventory gets used up. So just to understand, are there similar to the exchange rate variation clauses also commodity linked to cost [indiscernible]?

The RV clause is there in each and every contract, and even in the repair and overall contracts also.

Yes. That is clear, sir. But yes, on the commodity and other input costs also, are there pass-throughs available?

Other input costing only material, lever and all those things, this escalation is already factored. And material escalation is already factored in the contract itself. So if -- I don't think and based on our negotiation and the [indiscernible] and all those things, we don't see any significant increase in the material cost also in our future program. We were 97 LCA already, we have placed purchase orders.

Yes, yes. Understood, sir. Very clear on that, sir. One more question. So now that next 2 years, we'll be working on 5, 6 programs parallelly. With LCH purchase and also coming up for delivery and SU-30. So how are we -- while we have mentioned about CapEx and all, with regards to manpower and other resources, how are we placed? What could be the peak aircraft and helicopter deliveries that we could do, say, in 28 'or '29. Any color on that? Because you understand there is increasing private sector competition also for manpower and all.

All the delivery for the next year will be as per the contract. You touched upon the manpower and other things. You see now we have increased -- we are trying to increase our efficiency in site. And we are trying to outsource because we have partnered with so many people outside to do the main full structures so that I will be the core integrator. And we are trying to in-source as much as possible so that my manual cost remains as low as possible so that I can use in-sourcing and outsourcing so that I get a better efficiency and the better costing for the products.

And still, we are hopeful, this will be a balancing thing. '28, '29, we are talking about 2 to 3 years down the line. But we have not closed our equipment process also. It will be a balancing one, more of outsourcing, in-sourcing and some recruitment will also be there in the due course.

Understood, sir. And with -- for all your manufacturing, just one clarification, all the manufacturing projects, revenue recognition is only at the time of delivery, right? It is not on percent of completion method?

It's against delivery.

It's against delivery. So we will have possibly a lumpy year 2 years down the line? Okay, sir. And yes, yes. And sir, just one follow-up to the previous participant. We have read about press reports about the GE F414 engine, right? So the Mk2 prototype you mentioned by next year and the order -- by when it could come, sir, any sense on that?

That will be by end of maybe next year because it has to fly and then finally, airports will start pushing the paper. So we are expecting by end of maybe another 2 years, 2 years down the line, we can expect the order.

[Operator Instructions] The next question is from the line of Kavish Parekh from 360 ONE Capital.

On the Sukhoi program, I have 2 questions. First, on the 12 Sukhoi-30 aircraft order, what is the expected execution time line? And when are deliveries likely to commence? And how many aircrafts should we expect to be delivered annually over the next 3 years?

Okay. The product, as per contract, it starts from '27, '28, that is on -- that is there's only one aircraft as per contract. And next year, we are going to complete it. All 11 will come.

So 11 units in FY '29?

Yes. That will complete.

And second, on the Sukhoi-30 upgrade program, what is the likely time line for contract signing and subsequent execution of the same? How should we think about annual revenue recognition from this program when execution begins? And what would be the margin profile for the Sukhoi-30 upgrade revenue? Will it be closer to manufacturing margins or ROH margins?

SU-30 upgrade [indiscernible] program now. The design program will go on up to maybe 5 to 6 years. And so we are expecting that CCS approval, we're expecting the CCS approval current financial year. So the design probably is 5 to 6 years. Then only the upgrade program will start, production will start after 5 to 6 years. So the margin -- design margin, as result, it is a [indiscernible] of 10% to 15%.

The next question is from the line of [ Sumit Vishal ] from Axis Capital.

Good afternoon. My sincere regards and congratulations to Mr. rv for shouldering this huge responsibility for the nation on heading HAL. My first question is the 10% to 12% revenue growth numerically in the second half of the year, how many LCAs are you sort of factoring in terms of dispatch? Because it appears to be a single-digit number given the value per LCA. And when I look at the inventory plus contract FX, that's almost INR 490 billion. So what percentage of your inventory and revenue is for the LCA program now? So maybe if you could address these 2 points as the first question.

As I initially explained also since we are getting around 20 engines. We are planning to deliver around 20 LCA. I'm not telling that it may happen in this quarter or next quarter or the last quarter. But this financial year, we are planning to deliver this many aircraft, this 20. Next year, we are planning to deliver. As regard to the -- what is the second question? Which is the other part?

So inventory for LCA is around INR 7,500 crores. And if you see about the unbilled revenue, unbilled revenue is against the delivery already happened. It's not against the inventory. Whatever we have delivered because of the documentation and all the same, the [indiscernible] of documentation that this would not bill it. So that has nothing to do with the LCA, I mean, nondelivery of LCA. Nondelivery of LCA, our inventory is around INR 8,100 crores, if you include our raw material and the [indiscernible].

The next question is from the line of [ Sharan Kapur ] from Jefferies.

I'm going to start with a bookkeeping question. If you could quantify what was your export and development orders and sales for FY '26?

The export order right now, the export order is around 400 crores, and the development order is around 3,000 crores.

Okay. Got it, sir. And secondly, I just want to understand on this pipeline that you mentioned of 900 billion orders over the next 2 years, including ROH. So if we keep ROA of about 200 billion -- INR 20,000 crores a year on the side, that is about inr 50,000 crores. You mentioned 143 ALH and 40 Dornier aircraft. Could you quantify what -- how much these programs are worth and what other programs are in the pipeline beyond these, such as the UHM aircraft and other -- 12 LUH [indiscernible] production that was pending. So what are the time lines and quantities and values of those?

Since these contracts are not 100% finalized, that's why I did not give the number, detailed numbers for each contract because it takes time. But on the -- like a ballpark figure, I'll just explain what are the numbers the services are expecting. And we have started discussing with them with these numbers with the top level cost with them. But however, it is not finalized. That's why we have not given any numbers.

The major contributor will be the ALH 137 program. And as usual, your ROH program will be at the same level.

The next question is from the line of Harshit from Elara Capital.

Congrats for recent results and the CMD for having this role. Just a few questions. One is there was a news that there will be a penalty on GE for the delayed engines. So would that be from you or that would be from the Ministry of Defense? And if that is true, how do you recognize that? Any quantum that you can share?

No, these are all commercial activity as per the purchase order with GE, whatever is there. But we are talking about only the penalty. There are so many terms and conditions, which is available in the contract. And this [indiscernible] is already available in our website also. It's on there. So it's -- as for the procedure, we apply not only to GEs, these are applicable for all the purchase order we placed on the [indiscernible].

Okay. But any amount that you can suggest? What could be?

So that's why we don't want to give any...

It depends. And delivery will happen when the payment will be made. At that time, we'll see what it will look like. It's not the right time to tell what will be the -- we cannot quantify the penalties right now. Let the delivery happens, then we'll...

Okay. And sir, lastly, just wanted to check on the AMCA program. I know you are not part of it, but is there a possibility during the production time HAL could be involved? And secondly, is there a possibility of you getting orders for SU-57?

First, let me answer about AMCA. This, we have made clear last time also because the current tender, whatever or the tender that is going to come is that [ RFI, ] which was placed is for the [indiscernible] program only, that is to build prototypes. And they have not indicated that the same person will do production. So we are hopeful that we will participate in that. And as far as SU-57 is concerned, it's the government's call, so we cannot comment on that right now.

The next question is from the line of Harshit Patel from Equirus Securities.

My question is on the ALH. Have we completed the execution and delivery of all the legacy contracts, including the army contract for [ 24 members? ] And what will be our execution shed for the contract of the 143 ALH that you were mentioning that we will receive in the next couple of years.

Yes, the deliveries of ALH, we have no issues. We have delivered everything as per contract. And as far as the [indiscernible] is concerned, now we have augmented the facility in the current helicopter division. And outside, private vendors also are helping us in making the structure. So we are confident that ALH, because the difficulties of our program in a sense, designed by [indiscernible], we will be ahead of schedule.

And just a clarification of HTT-40 program. I wanted to check on any supply chain issues with the production, especially on the Honeywell engines. Also, if you can share the execution strategy, that will be helpful. Did you mention we will start in FY '27 or FY '28 delivery?

'27, FY '27.

And how much units we are planning for FY '27? And I think we should be able to complete this by FY '30. Is that the right understanding?

Yes, you are right. You are right. See, the thing is, as I said, the supply chain of Honeywell engines, it was there a few months back. Then we have continuous review and now it is stabilized. So the engines will start going from next month. And we are planning around 20 plus this year to deliver. And every year, it continues because now we have 2 lines, one in Bangalore, another one in Nashik. So we should be able to ramp up faster and deliver.

Can I ask one more question, if that's okay?

Yes, please go ahead.

Yes. Sir, what is the status of [indiscernible] integration? By when we will start producing [indiscernible]? Is the system integrated on them? I believe the earlier plan was to start from the [indiscernible] unit. Is that still intact?

No. Because this is controlled by the [indiscernible]. So we are only a production agency. Once they give the production clearance, we will go to the [indiscernible] partner over this is and we'll [indiscernible]. So as of now, it is not coming in the [indiscernible] program. So in the [ 97 ] program, we are planning to integrate this one to that.

The next question is from the line of [indiscernible] from Goldman Sachs.

So I wanted to ask provisioning as a percentage of revenue was on the lower end this year. Can you please elaborate on that? And what would be the stable state guidance that we can consider for the same?

The provision is based on the -- any happening of an event. See, last time, the provision we made because [indiscernible] aircraft got into an accident. So for the replacement purpose, we made a provision of INR 800 crores. And that situation is not there in the current year. So it's not comparable. Provision is based on any happening or not happening. So for that reason, last year, that INR 800 crores was there and that INR 800 crores is not there current year. So there cannot be any guidance percentage of revenue and in provision.

Understood, sir. And sorry if I missed this, but could you give the exact numbers for the manufacturing ROH development and exports to all 4 of these?

Actually, for the current year, if you see, manufacturing is around 28%, and then we pair an overall 60%, 62%, and other [ same ] percent.

The next question is from the line of Neelotpal Sahu from JM Financial.

Just one clarification. Can you help quantify the manufacturing share of revenue for the INR 48,000 crores of [indiscernible]? That would be the first question.

Can you repeat? It was not clear.

So INR 48,000 crores, I assume includes some ROH component and some of the payments to [ ADA ] as well. So can you help us understand what would be the share of purely the manufacturing part of revenue that will accrue to us?

INR 48,000 crores? Where did you get that number? INR 48,000 crores? It is our order book position.

The complete order is INR 48,000 crores.

The complete order is on HAL. So the entire contract is with HAL and whatever supply will be made by HAL, entire thing will be revenue for HAL.

The next question is from the line of [ Sanjeev Zarbade ] from [indiscernible] Stock Broking.

Sir, there were [indiscernible] that in the future, the growth of manufacturing revenue would be faster than ROH and it could be probably impact margins going ahead that you are guiding for 30% to 31% EBITDA margin. So how should we read into this?

Yes, manufacturing, see, your repair and overall also, what we said, see, now current year, if you see our revenue growth is around 7%. And as we grow, manufacturing sales manufacturing sales will grow. Then definitely, the composition, what is there right now is around 28% to 30% to 70%. So it will be in the range of 50 to 50, 50-50. So there is no reduction in the repair and overall sales, repair and overall sales will also grow by addition of the new platforms and all those things. And the manufacturing as well, manufacturing sales will grow. The composition only, it will be now 30-70, it will be in the range of 50-50. And your revenue growth would also be there. So that, we don't feel -- and there will not be any stress on the profitability from the manufacturing contract. Though revenue there -- I mean the profitability on repair and overall, a little bit higher than manufacturing. But repair and overall, growth will be there as well as manufacturing there, we don't see any stress on the manufacturing sales also in terms of profitability. That 20% will be maintained.

The next question is from the line of Dipen Vakil from PhillipCapital.

Congratulations on the great margins. Sir, first question is I want to understand your order book position with respect to the projects, which are currently under execution. Like what is the pending order book for engines and ALH helicopters? So can you help us with the amount or amount breakup for the order book currently executed?

Currently, as you see, [indiscernible]. And we have 12 to 30, we are doing AL-31 FP engine, we are doing Dornier-228. ALH against [indiscernible] for this year, we are doing HTT-40 and [indiscernible]. These are the major platform which is already going on, which I told in my opening statement that around [ INR 4 lakh 84,000 crores ] order rates there.

The next question is from the line of [ Amit Andani from PL Capital. ]

So my question again on LCA. So you did highlight that I think there's a final leg of iteration and probably 6 by September, we can deliver. So I think so far in April, May, we may not have received engine. So what is the understanding now? Are we still targeting to get at least 2 engines per month from probably next month till March?

No, Mr. [indiscernible] again. Thanks for your question. June, we are expecting an engine now. Then afterwards, it is going to August. From August, they have committed 2. And then by end of this year around 15 to 20, yes, because 15 is [indiscernible], I would give, but a balanced one, you may get more which is still not coming in. So that's why I told 20 LCA will deliver this year.

So at least 15 additional and that will be largely starting from August to March?

Yes, exactly.

So that deliveries will slip to next financial year. Is it correct? So how much time it takes for engine to be received after you start delivering, say the final delivery happens to the [indiscernible]? So how much time it is going to take?

Around 30 to 45 days.

30 to 45 days, understood. Sir, what is the core reason that last financial year also, I think you guys received a commitment of at least 2 engines per month, but nothing of that has materialized. So is it the issue at the GE in terms of supply. So what is the core issue that so much of variability is happening in terms of delivery from GE despite now things have been okay versus the growth time? So what is the core issue at their end?

Yes. The supply chain issue is global. It has not spared anybody. Even the big players like GE or [indiscernible], everybody are impacted with the supply chain. And they also have gone through that cycle. There were some costing issues were there because we, as I explained earlier, we went to the Tier 2, Tier 3 suppliers also to understand the real issue. And they had a real supply chain issue. So it is, again, supply chain. As I told that the disruption is [indiscernible] also. Now they have found alternate for that. So that's why he is committing the numbers what I explained to you.

Understood, sir. Sir, finally, you mentioned about the ongoing project. Just wanted to understand in terms of numbers, how much, for example, the engines RD and AL FP, how much numbers you're targeting for deliveries across different platforms that would help?

Our target is around 32, 35 engines per annum AL-31 FP. And RD-33, only [ 15 ] are left and those [ 15 ] will be delivered in the current financial year, '26, '27.

Right. So what's the target for HTT, ALH?

ALH, the 10 numbers are left out, and then we are going to deliver those 10.

Another 5 and [indiscernible] is 8. These are our targets. They're all on track, and we'll be able to do that.

And LCA, you said probably we are targeting 15 to 20 deliveries this financial year? That's right?

The next question is from the line of [ Shah Agarwal from ] Asian Market Securities.

This is [indiscernible]. So first thing, you've added about INR 9,000-odd crores into your inventory this year. And you said bulk of that is the LCA inventory that you've carried. So this is -- this is all the bodies that you had made, the airframes and the engines, all of that is sitting in inventory, is it?

Yes, yes. That is a [indiscernible], what we have built up. We don't have only [indiscernible]. You're only talking about LCA. Many programs are going on. And the inventory repair, if you see, out of INR 30,000 crores, INR 33,000 crores, INR 20,000 crores is towards repair and overall and [indiscernible]. And so we built up inventory for repair and overall also, spare supply, then we have [indiscernible], engines, [ 30, 33 ] engines, then LCH, to some extent, ALH. So this inventory for all those platforms, HTT-40. LCA is part of it. And as I said, out of 30,000 LCA is around INR 8,000 crores.

Sure, sure. So the second thing, we've had capacities of 24 LCAs and assuming that these deliveries begin as and when in this fiscal. Would it be fair to assume that we should start having a better operating efficiency and some recovery in margins because of that as well since most of that facility would be lying idle as of now?

No. Why? They are not idle because you see production is happening. We have 3 lines now, 2 in Bangalore and 1 in Nashik. Not a single production line is idle because we are continuously building the structures, equipping them. Everything is being done. It's not that these facilities are idle. That is why we were able to do what we showed at the March end, [ 21 and 22 ] structures ready. Those structures are fully -- I'm sorry, fully built and engine ground run completed, means all the systems are working fine. So there's nothing called idle capacity as of now. And we have [indiscernible] orders are also coming. So all these facilities will be 100% utilized throughout the year.

Okay. And sir, just since you've been mentioning it time and again that there is an ongoing process of the checking and the facilities on the LCA and approvals are expected once we complete most of these parameters. I'm just trying to understand, let's say, as and when the first round of deliveries happen, does that mean that all our dedicated numbers will have the same software or there will still be upgrades coming in on the pending volume that needs to be delivered to the armed forces?

No. Because once the certification happens, all aircrafts will be with the same software. Minor modifications will be there. There's always continuous improvement will be there. But that will not be like a huge jump. Minor updates will be that because once we fly, few improvements will be required. So that we will take [indiscernible]. And most of the time, [indiscernible].

Okay. And so that is why you're saying that once those deliveries happen we should expect better returns on the spare part use and the ROH income. So will all of those changes be part of the service income?

LCA will not be [indiscernible] because these deliveries are happening now. These ROHs will come for some time.

There are already 38 LCAs we have delivered from earlier contracts. Those things will come now. Then with ALH continuously, we are supplying 2025 every year. So those things will come. So there is an addition in the quantity repair and overall quantity. And these LCAs will be delivering, right, the current financial year, maybe like 3 years, 2 to 3 years after that, we will [indiscernible].

The next question is from the line of [ Sagar Dhawan ] from [indiscernible].

Sir, just wanted to understand on the ROH side. Typically, in the LCA, like you said, [indiscernible] in the INR 100 of the value of the equipment, what is the relative ROH portion in that? I mean if [indiscernible] would be and which component in terms of value?

ROH, see, repair and overall has nothing to the sale of the equipment. After that, it depends on the -- what type of repairability, the repair or it's a full overall. If it's a full overall, we have a separate kind of mechanism, pricing mechanism, 10 to 15 will be on cost-plus basis. So it will come for the overhauling and whatever will be the cost -- actual cost in terms of component, material, labor. So the selling price will be decided on that basis. And based on the samples, then the overall cost will be fixed. Okay. So as I say, in the procedure, repair and overall procedure. We call it PPIC, pricing policy [indiscernible] mechanism. So it will be done in that way. So there is no percentage that ROH will be a [indiscernible] percentage of the equipment cost.

Got it. And sir, one more clarification. When you receive an order for a new [indiscernible], let's say, [indiscernible] order you received a couple of years back, [indiscernible] did the order flow include the ROH portion in that or that order is only for the [indiscernible]?

It's only for production. It's only for the delivery of the quantity along with the [indiscernible]. That will be a separate order later.

The next question is from the line of [ Shubham Dalia ] from Nirmal Bang Institutional Equities.

Congratulations on a great set of numbers. Sir, my question is on the number of deliveries that we are expecting and the guidance that is there because we are expecting around 20 plus [indiscernible] then we are also expecting LCA to go, then the guidance of 10% to 12%. So are we seeing some risk in any of these programs? That's my first question.

Risk, when we tell 10% to 12%, then hopefully, we have taken all these things into factor while we conclude our -- the revenue target for the current financial year. So hopefully, we expect that whatever we have told right now we will be delivering. And we have our own [indiscernible] to see that if something goes wrong, and we will always have our plan B in the year that we cannot tell you right now. But we are confident that LCA and HTT-40 will be delivered and whatever guidance we are giving, 10% to 12%, we'll be able to maintain it.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments.

It's Ravi, CMD, again. I just want to thank each one of you for taking your time and asking us questions regarding all the questions. And we, at HAL are continuously working towards meeting these targets, what we said. And again, once again, thank you to each one of you for participating in this call. Thank you very much.

Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Thank you.