Industry Structure and Development
The aviation industry in India is currently experiencing rapid technological advancements and undergoing significant transformation in all fields - from pilot training and aircraft maintenance to airport infrastructure and management and beyond. The sector has emerged as one of the fastest growing sectors in the country.
Companies are entering the Indian aviation market due to its strong growth potential driven by a rising middle class, increased disposable incomes, and a large young and aspirational population. This has led to a surge in domestic as well as international air travel demand making India a promising market for airline operations as well as for the support services s like airport infrastructure, maintenance, repair, and overhaul (MRO) services, etc.
The Company earns its revenue by providing technical support and leasing services.
The Company has leased hangar space and buildings to a Maintenance, Repair and Overhaul (MRO) organization. The Company also generates income from the use of infrastructure facilities including runway and hangars.
Performance
(Rs. in lakh)
Particulars |
2024-25 | 2023-24 |
Total Income | 4214.61 | 3086.05 |
Profit after Tax | 1807.62 | 1113.15 |
Opportunities
The Indian government has approved 100% Foreign Direct
Investment (FDI) via the automatic route for the Maintenance, Repair, and Overhaul (MRO) Sector. The Government of india has been instrumental in developing policies to give a boost to the aviation sector. For this, the UDAN-RCS scheme has been launched by the government which aims to increase air connectivity by providing affordable, economically viable, and profitable travel on regional routes. The industry is experiencing growth resulting in a rising demand for professionals and increasing MRO (Maintenance, Repair, and Overhaul) activity. The Government of India is investing in expanding airport capacity, upgrading existing facilities, and developing new greenfield airports to handle the increasing air traffic. Establishing GIFT City as a hub for aircraft leasing and financing aims to reduce reliance on foreign leasing companies and promote domestic capabilities in this area.
The Government of India is promoting carbon neutrality and net-zero emissions at airports, encouraging responsible aviation practices and reducing the environmental impact of the industry.
The Company is on a constant lookout for partners to strengthen its defence and aviation sector presence and penetration and has, in this endeavour, invested in Altair and Zenith Precision.
Threats
Shortage of skilled workforce, political risks, changes in legislation and regulation, business interruption and cyber incidents are major challenges faced by aviation industry. Along with these delay in decision making and finalisation of contracts by the Defence Sector for their modification / refurbishment projects is a challenge for the industry.
Outlook
A stronger collaboration between the government and the private sector under the Atmanirbhar Program is expected to provide a fillip to the growth of the aviation sector. With increased demand and the ability of the Indian industry to leverage this for sustained technology upgradation, India has the potential to transform itself into an aerospace manufacturing hub in the near future.
There is a renewed thrust of indigenous manufacturing especially in Defence. The Company, being one of the first organized players in defence space, will explore new opportunities in the area under Atmanirbhar Bharat Scheme.
Risks and Concerns
Possible delayed lease rentals from the major customer and the resultant outstanding amount may affect the upkeep of the infrastructure. Our approach to risk management is well entrenched in our Management System which is monitored internally and externally by well qualified personnel and third party agencies.
Internal Control Systems
The internal control system is designed to ensure that all the financial and other records are reliable for preparing financial statements and for maintaining accountability of the assets. The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly.
Key Financial Ratios
In accordance with the Listing Regulations, as amended, the Company is required to provide details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios. The Company has identified the following ratios as key financial ratios:
Particulars |
2024-25 | 2023-24 | Change (%) |
Debtors Turnover | 6.39 | 4.26 | 50% |
Inventory Turnover | 8.58 | NA | - |
Debt- Service coverage ratio | NA | NA | - |
Current Ratio | 3.84 | 2.89 | 32.87% |
Debt Equity Ratio | Nil | Nil | - |
Operating Profit Margin (%) | 58.73 | 52.65% | 11.55% |
Net Profit Margin (%) | 45.04 | 35.65% | 26.34% |
Return on Net Worth | 16.02 | 11.28% | 42.02% |
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companys expectations or predictions are forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include demand-supply conditions, raw material prices, changes in Government regulations, tax regime, economic developments within the country and other factors such as litigation and labour negotiations.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.