Indian company Hindustan Aeronautics (HAL) reported a 77% rise in first-quarter profit, helped by the success of aircraft manufacturing contracts.
The state-owned fighter jet manufacturer and maintainer said its consolidated net profit reached 14.37 billion rupees ($171 million) in the quarter ended June 30.
HAL is one of several capital goods and manufacturing companies in India that have benefited from the government’s increased capital spending as well as the drive to localise defence manufacturing.
The company manufactures military aircraft, helicopters and engines and also offers maintenance and repair services. Maintenance is HAL’s core business, accounting for 72% of its revenue for the year ending March 2024.
Analysts had earlier noted that stable demand for aircraft and engine maintenance and strong manufacturing contract completions would likely help improve HAL’s earnings in this seasonally weak quarter.
However, while HAL’s earnings growth “is in line” according to Harshit Kapadia of Elara Capital, gross margins – which fell to 3.02% from 4.8% in the previous year – “have registered a bigger decline than expected”.
HAL shares, which were down 0.8% ahead of the earnings release, rose 2.3% before paring their gains. Shares were down 0.8% in the latest session.
Fellow defence company Bharat Electronics reported a rise in quarterly profit, while Bharat Dynamics posted a decline.
($1 = 83.9525 Indian Rupees)
