Hindustan Aeronautics Q3 profit surges 9% to Rs 1,261 crore, boosted by aircraft demand

Hindustan Aeronautics Q3: India's leading aerospace and defence company, Hindustan Aeronautics Ltd, announced a robust 9 per cent increase in third-quarter profit on Monday, fueled by rising demand for aircraft from the defence sector and an inventory-related gain.

According to the company's filing, consolidated net profit surged to Rs 1,261 crore for the three months ending December 31.

The surge in profit comes amid a backdrop of increased capital expenditure by the Indian government, particularly benefiting capital goods and manufacturing companies following the full budget announcement in February 2023. This move has notably favored defence equipment manufacturers such as Zen Technologies, Bharat Electronics, and Bharat Dynamics, all of which have reported higher profits in the December quarter.

HAL, which serves clients including the Indian Army, Navy, and Air Force, as well as aerospace giants Airbus AIR.PA and Boeing BA.N, saw its revenue climb by 7 per cent to Rs 6,061 crore in the October-December period. However, the company does not provide a segment-wise revenue breakdown.

Total expenses for HAL decreased by over 2 per cent to Rs 4,838 crore, partly attributed to a gain of Rs 111 crore from inventory-related changes. In the preceding year, the company had recorded expenses of Rs 255 crore to account for its inventory of finished and unfinished goods, as per the exchange filing. Notably, HAL does not specify the breakdown of its inventory changes.

Despite the positive financial performance, the company faced challenges with raw material costs, which increased by nearly 37 per cent due to the global surge in prices of certain metals, including steel, during the quarter.

HAL's impressive Q3 earnings reflect the resilience of the aerospace and defence sector in India, buoyed by sustained demand and government initiatives to strengthen domestic manufacturing capabilities in the sector. As HAL continues to play a pivotal role in serving both domestic and international clients, analysts anticipate further growth prospects in the coming quarters.

(With Reuters inputs.)