CARE Ratings Reaffirms HAL’s AAA Rating with Stable Outlook for ₹6,050 Crore Bank Facilities

Mumbai: Hindustan Aeronautics Limited (HAL) has announced that CARE Ratings Limited has reaffirmed its credit ratings for the company’s bank facilities worth ₹6,050 crore.

The rating agency reaffirmed CARE AAA (Stable Outlook) for long-term facilities and CARE A1+ for short-term facilities, reflecting HAL’s strong financial profile and strategic role in India’s defence ecosystem.

Strategic Importance to India’s Defence Sector

CARE Ratings highlighted HAL’s critical position as a core aviation supplier to the Government of India, which continues to hold a 71.64% stake in the company.

The agency noted that HAL maintains an integrated presence across the aerospace value chain, including:

• Aircraft and helicopter design

• Manufacturing and development

• Maintenance, repair, and overhaul (MRO) services

The company primarily supports the aviation requirements of the Indian Air Force, Indian Army, and Indian Navy.

Strong Order Book Ensures Revenue Visibility

HAL reported a robust order book of ₹2.59 lakh crore as of September 30, 2025, significantly higher than ₹1.33 lakh crore in December 2024.

Key components of the order book include:

• ₹2.24 lakh crore in manufacturing orders for aircraft, helicopters, and engines

• ₹30,569 crore in repair, overhaul, and spares contracts

CARE Ratings said the order pipeline remains strong, with potential new contracts worth ₹60,000–₹1 lakh crore expected over the next one to two years.

These include prospective orders for:

• 143 Advanced Light Helicopters (ALH)

• 10 Dornier Do-228 aircraft for the Indian Navy and Indian Coast Guard

• Upgrades of 40 Dornier aircraft for the Indian Air Force

Healthy Financial Performance

The rating reaffirmation also reflects HAL’s strong operational performance.

For FY25, the company reported:

• Total Operating Income: ₹30,146 crore

• Profit After Tax: ₹8,317 crore

• PBILDT Margin: 29.19%

During the first nine months of FY26, HAL achieved:

• Revenue: ₹19,146 crore (up 11% year-on-year)

• PBILDT Margin: 24.60%

Despite delays in engine supplies affecting deliveries of HAL Tejas, revenue growth was supported by higher repair and maintenance services.

Strong Liquidity and Minimal Debt

CARE Ratings noted that HAL maintains a strong liquidity position with cash and cash equivalents of about ₹43,465 crore as of September 2025.

The company has minimal reliance on external borrowings due to:

• Significant customer advances

• Strong internal cash generation

• Efficient receivables management

Its overall gearing ratio remains nearly zero, reflecting a very conservative debt profile.

Outlook: Stable

CARE Ratings expects HAL to maintain its leadership position in India’s aerospace and defence sector due to:

• Long-standing relationships with defence forces

• High entry barriers in aircraft manufacturing

• Continued government support for domestic defence production

However, the agency noted that HAL’s revenue remains highly dependent on defence spending and orders from the government.

About Hindustan Aeronautics Limited

Headquartered in Bengaluru, Hindustan Aeronautics Limited is a Maharatna public sector enterprise engaged in the design, development, manufacturing, and maintenance of aircraft, helicopters, and aerospace components.

The company also manufactures structural parts for launch vehicles used by the Indian Space Research Organisation (ISRO).