Exclusive | HAL in potential deal for Tejas MK-1A fighter jet, advanced light helicopter with four nations, say sources

The state-owned Hindustan Aeronautics Ltd (HAL) is in negotiations with four nations, for export orders in the field of aerospace and defense equipment, which represents a major advancement in the government’s Make-in-India defense effort, sources told Zee Business.  

The sources, who spoke to Zee Business on the condition of anonymity, said that the total estimated value of these potential transactions is close to Rs 70,000 crore and that Argentina, Egypt, Nigeria, and the Philippines are in the advanced stages of negotiations with HAL to purchase fighter jets and helicopters.

Argentina is considering buying 15 LCA MK-1A and 10 ALH helicopters from HAL, Nigeria is exploring a purchase of 16-18 LCA MK-1A, Egypt is contemplating acquiring 20 LCA MK-1A fighter jets, and the Philippines is considering discussions to buy 20 ALH helicopters from the Indian aerospace giant, the sources added.

HAL, the supplier of aircraft to the Indian military, also supplies to Airbus and Boeing.

At the time of publishing this report, HAL was yet to respond to Zee Business's email requesting clarity on the development.  

However, in a separate interaction with Zee Business, Dr D K Sunil, Director R&D and Engineering, HAL, said: We have the capability to fulfill orders promptly, matching our production capacity with the orders we receive. If needed, we are prepared to invest in expansion."

Sector analysts believe that the rapid expansion of the Bengaluru-based HAL signifies a remarkable milestone for the Indian aerospace industry, showcasing the prowess and competitiveness of HAL's aircraft, including the Helicopter ALH and Tejas MK-1A.

What brokerages say about HAL

Morgan Stanley, in a report in late November, said that the Indian Air Force (IAF) is working on a project to upgrade its fleet of Su-30 fighter jets, whereby 84 units will be upgraded, and since 2000, India has procured 272 Su-30 fighter jets, in tranches.

HAL’s cash and equivalents, as of the end of September 2023, were at Rs 21,400 crore, according to an ICICI Securities report, dated November 14. 

"Going ahead, we believe that RoH will have a higher share (around 40 per cent) compared to the past, leading to higher margins in FY24, though the execution of Tejas Mk1A is key for earnings growth in FY25E,” the brokerage said. 

HAL shares ended up 2.2 per cent at Rs 2,794 apiece on BSE on Monday.