HAL Signs Rs 62,370-Crore Contract With Ministry Of Defence For 97 LCA Mk1A Aircraft

The Ministry of Defence on Thursday signed a Rs 62,370-crore contract with Hindustan Aeronautics Ltd. for procurement of 97 LCA Mk1A aircraft for the Indian Air Force.

The deal includes 68 fighters and 29 twin seaters, along with associated equipment, for the Air Force, the Ministry of Defence said on Thursday. The delivery of these aircraft would commence during fiscal 2027-28 and be completed over a period of six years.

The aircraft will have an indigenous content of over 64%, with 67 additional items incorporated, over and above the previous LCA Mk1A contract that was signed in January 2021.

The project is being supported by a robust vendor base of nearly 105 Indian companies directly engaged, said the Ministry of Defence.

According to the ministry, the integration of advanced indigenously developed systems such as the UTTAM Active Electronically Scanned Array Radar, Swayam Raksha Kavach, and control surface actuators will help strengthen the Aatmanirbharta initiatives.

The government-owned company signed a technology transfer agreement with Indian National Space Promotion and Authorisation Centre (IN-SPACe), NewSpace India Ltd., and Indian Space Research Organisation earlier this month.

After decades of making combat aerial equipment, HAL will soon manufacture the Small Satellite Launch Vehicle (SSLV) rockets developed by ISRO. HAL had become the successful bidder for the manufacturing and design technology in June.

The SSLV is a three-stage vehicle designed to launch satellites weighing less than 500 kg into Lower Earth Orbit (LEO). Under this contract, HAL will absorb the technology in the first two years, followed by a 10-year production phase, according to a statement.

HAL stock rose as much as 2.20% during the day to Rs 4,827.60 apiece on the NSE. It was trading 1.51% higher at Rs 4,795.40 apiece, compared to 0.56% decline in benchmark Nifty 50 as of 3:00 p.m.

The scrip has risen 9.25% in the last 12 months and 14.76% on a year-to-date basis. The total traded volume so far in the day stood at 1.71 times its 30-day average. The relative strength index was at 54.

Eighteen out of the 22 analysts tracking the company have a 'buy' rating on the stock, two recommend a 'hold', and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 5,646.6, implying a potential upside of 23.6%.