HAL Draws Focus After Reports of Second GE-404 Engine Acquisition for LCA

16 Jul 2025 , 12:56 PM

India has received the second GE-404 engine from the United States for its Light Combat Aircraft (LCA) Mark 1A programme, according to defence officials. The engines are part of the Indian Air Force’s existing order for 83 LCA Mark 1A jets, currently under production by Hindustan Aeronautics Ltd (HAL). The aerospace PSU is expected to take delivery of all 12 engines by the end of this financial year.

A proposal to procure an additional 97 LCA Mark 1A jets is in its final stages of evaluation after receiving clearance from the Ministry of Defence. The move is likely to significantly expand the IAF’s fleet of indigenous fighter jets.

HAL had earlier informed to news sources that the second engine was scheduled to arrive by the end of July, a timeline that has now been met. HAL Chairman and Managing Director DK Sunil said the company expects to finalise a ₹2,000 crore deal for Dornier aircraft during the current fiscal year.

He also confirmed that the recent green light from the Defence Acquisition Council for upgrading 84 Sukhoi-30 jets would translate into a ₹65,000 crore project. This large-scale upgrade programme is expected to span roughly five years, with the first upgraded Light Combat Helicopter (LCH) likely to roll out in FY28.

In a separate development, HAL has declared a final dividend of ₹15 per equity share for FY25, translating into a 300% payout based on the stock’s face value. The record date for determining eligible shareholders is Thursday, August 21. Given the government’s 71.64% holding in HAL, it stands to receive around ₹718.6 crore from this dividend.

This marks the second dividend declared by HAL for the financial year, following an interim dividend of ₹25 per share announced in February. By comparison, the company had issued a final dividend of ₹13 per share in FY24.

On the earnings front, HAL posted a net profit of ₹3,958 crore in the March 2025 quarter, down 7.8% year-on-year. Revenue for the quarter declined 7.2% to ₹13,700 crore.

Despite the drop in top-line growth, the company maintained robust profitability, reporting EBITDA of ₹5,292 crore and operating margins of 38.6%. Looking ahead, HAL is eyeing a significant expansion of its project pipeline, with a target of building an order book worth ₹2.6 lakh crore by FY26.

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