📰 HAL Q2 FY2025-26 Results: Revenue Rises 11% to ₹6,629 Crore, PAT Up 10% — Management Eyes Strong H2 Growth

HAL Q2 FY2025-26: Growth Continues Despite Margin Pressure

India’s state-run aerospace and defence giant Hindustan Aeronautics Limited (HAL) posted another strong performance in the second quarter (Q2) of FY2025-26, with double-digit revenue and profit growth. However, rising input costs and operational expenses weighed slightly on margins.

For the quarter ended September 30, 2025, HAL reported revenue from operations of ₹6,629 crore, marking an 11% year-on-year (YoY) increase, while net profit (PAT) rose 10% YoY to ₹1,669 crore.

The company attributed this growth to strong execution across key aircraft, helicopters, and maintenance programs. Sequentially, revenue rose from ₹5,568 crore in Q1 FY2025-26, while PAT increased from ₹1,384 crore, indicating momentum recovery after a seasonally slow start to the fiscal year.

📊 HAL Quarterly Financial Comparison (₹ crore)

Source: Company filings, BSE data, Economic Times, and Reuters (November 2025)

Revenue Drivers: Robust Defence Orders and Program Deliveries

HAL’s Q2 performance reflects continued momentum in India’s defence manufacturing and aerospace production under the government’s ‘Atmanirbhar Bharat’ initiative.

Revenue growth was driven by:

• Higher execution of production contracts for Tejas Mk1A Light Combat Aircraft, Advanced Light Helicopters (ALH), and Dhruv platforms.

• Steady rise in maintenance, repair, and overhaul (MRO) revenues from the Indian Air Force (IAF) and Navy.

• Increased spares and accessories orders from domestic defence customers.

The management highlighted that aircraft manufacturing accounted for nearly 45% of the total revenue mix, followed by rotary wing (helicopter) platforms and overhaul services.

“Our production programs remain on track, with Tejas Mk1A deliveries expected to ramp up in the coming quarters. Despite input cost pressures, we are confident of maintaining healthy margins,” said C.B. Ananthakrishnan, CMD (Additional Charge), HAL.

Margins Under Pressure: Rising Input Costs and Inflation

While HAL delivered solid revenue and profit growth, EBITDA margins contracted slightly to 26% in Q2 FY26, compared to 27.4% in Q2 FY25.

The contraction was attributed to:

• Higher raw material costs, particularly imported components.

• Rupee depreciation impacting imported spare parts and avionics.

• Increase in employee costs and project-related provisions.

According to the company’s earnings note, material expenses increased by 33% YoY, while overall expenses grew by 13%, partially offset by improved operational efficiencies.

Nonetheless, HAL continues to maintain one of the strongest margins in India’s manufacturing sector, supported by a robust order book and operational leverage in its core business.

Strong Order Book and Execution Visibility

HAL’s order book remains at a record high of ₹82,000 crore, providing multi-year revenue visibility.
Key contracts contributing to this order pipeline include:

• 83 Tejas Mk1A fighters for the IAF (₹46,898 crore order).

• Light Combat Helicopters (LCH) for the Army and Air Force.

• Advanced Light Helicopters (ALH Dhruv Mk III/IV) for defence and paramilitary.

• Rafale maintenance and overhaul contracts for the Indian Air Force.

Additionally, HAL is pursuing export opportunities in Southeast Asia, Africa, and Latin America for its HTT-40 trainer aircraft, LCH Prachand, and Tejas Mk1A.

The company is also expanding its defence indigenization footprint, with new engine and avionics production facilities being established in Karnataka and Tamil Nadu.

Management Guidance for H2 FY2025-26

HAL’s management offered a positive outlook for the second half (H2) of FY26, supported by increased production activity, stronger MRO contracts, and domestic defence budget allocations.

Key Points from Management Commentary:

• Revenue Growth: Expected to maintain double-digit growth for FY26, driven by faster project execution.

• Margins: Company aims to recover ~50–70 bps in EBITDA margins through cost optimization and higher-value projects.

• Export Growth: Targeting ₹2,500 crore in export revenue by FY27.

• Order Wins: New domestic orders expected from upcoming Tejas Mk2 and AMCA (Advanced Medium Combat Aircraft) programs.

• Capex: FY26 capital expenditure plan of ₹1,800 crore focused on R&D and capacity expansion.

“We expect a stronger H2 driven by increased deliveries and sustained government spending on defence modernisation. Cost discipline and localisation will remain key focus areas,” said Ananthakrishnan during the post-results investor briefing.

Comparison Snapshot: Q2 FY26 vs Q1 FY26 vs Q2 FY25

This comparison clearly shows HAL’s steady YoY growth trajectory and improved sequential performance, reinforcing the company’s execution strength.

Analyst and Market Reactions

Market analysts have lauded HAL’s consistent execution and strong order book but remain watchful of margin pressure due to input cost inflation.

Brokerages such as Motilal Oswal, ICICI Securities, and Axis Capital maintained a ‘BUY’ rating, citing long-term visibility and strong balance sheet.

“HAL’s Q2 performance is fundamentally solid. The company remains the cornerstone of India’s defence manufacturing ecosystem, with a clear roadmap for growth and localisation,” noted Motilal Oswal Research in its post-results commentary.

HAL’s shares gained nearly 2% post-results, reflecting investor confidence in the PSU’s operational resilience and dividend payout potential.

Key Challenges and Risks

1. Margin Volatility: Persistent input cost inflation and forex fluctuations.

2. Execution Delays: Dependence on supply-chain timelines and vendor readiness.

3. Policy Delays: Delayed defence procurement decisions can slow order inflows.

4. Competition: Growing participation from private defence players.

However, HAL’s monopoly in aircraft assembly and overhaul for the IAF, coupled with its strategic partnerships and technological base, provide strong competitive protection.

Conclusion: HAL’s Growth Story Remains Intact Despite Margin Headwinds

Hindustan Aeronautics Limited’s Q2 FY2025-26 results highlight a strong operational quarter, backed by revenue growth, profit expansion, and strategic execution.
While margin pressure remains a short-term challenge, the company’s massive order book, robust domestic demand, and export potential ensure a solid growth outlook.

With India’s defence indigenization push and HAL’s pivotal role in aircraft and helicopter manufacturing, the company remains India’s aerospace backbone and a long-term beneficiary of the country’s strategic self-reliance drive.

Bottom Line: HAL Q2 FY2025-26 results reaffirm the PSU’s growth trajectory — steady revenue, strong order visibility, and focused execution make it a key pillar of India’s defence future.