HAL Soars with Robust Profits, Faces Margin Challenges

On November 12, 2025, Hindustan Aeronautics Limited (HAL), India's state-owned aerospace and defense company, reported a 10.5% increase in its consolidated net profit for the second quarter ended September 30. The company's net profit rose to ₹1,669 crore ($189.89 million) from ₹1,510 crore in the same period last year, supported by strong order execution.

However, HAL's operating performance was impacted by weaker margins. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin declined to 23.5% in the quarter compared to 27.4% a year ago. This margin contraction was driven by a 17.3% rise in total expenses, primarily due to a 32.8% increase in the cost of materials consumed.

Despite the margin pressure, HAL's revenue grew by 10.9% to ₹6,629 crore during the quarter. The company's performance reflects the growing demand for defense equipment in India, as the government continues to push for self-reliance and modernization in the sector. In the Union Budget, the government allocated ₹6.81 trillion to the Defense Ministry and earmarked ₹1.8 trillion for local procurement.

During the quarter, HAL signed a significant contract worth more than ₹62,370 crore with the Defense Ministry for the procurement of fighter jets. The company also signed a technology transfer agreement with the Indian Space Research Organization (ISRO) and other space-related government entities.

Looking ahead, HAL had earlier stated that it expects to maintain an EBITDA margin of around 31% for the full year. The company's ability to manage its costs and improve operational efficiency will be crucial in achieving this target and sustaining its profitability in the coming quarters.