HAL May-23

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Questions and Answers

What was the growth rate over the last 4 to 5 years?

10%

7% (correct)

What is the expected growth rate for FY '25?

10%

Double-digit growth (correct)

What percentage growth has been achieved in the current financial year?

9% (correct)

14%

12%

What are the anticipated profit margins beyond FY '25?

12% to 15% Signup and view all the answers

What has contributed to the improved profit margins mentioned?

Improved efficiencies and productivity Signup and view all the answers

What is projected for the growth rate after achieving double-digit growth?

Stabilization at 14% to 15% Signup and view all the answers

What guidance has been provided for the growth in FY '24?

13% to 14% Signup and view all the answers

What was the improvement in guidance compared to last year's growth rate?

From 7% to 9% Signup and view all the answers

What is the expected outcome regarding the prototype production of LCA Mk-2?

It is expected to be launched shortly. Signup and view all the answers

What role does HAL play in relation to the engine production?

HAL is a production agency for GE 414. Signup and view all the answers

What is crucial for OEMs to do business with HAL in India?

Establish the TOT and manufacturing facilities in India. Signup and view all the answers

What is the current status of the TOT negotiations with GE?

Negotiations are ongoing without problems. Signup and view all the answers

What amount of HTT-40 development revenue was booked in the quarter?

INR 770 crores Signup and view all the answers

How much amortization has been booked in relation to the HTT-40 development?

INR 600 crores Signup and view all the answers

What is the ultimate goal related to TOT mentioned in the passage?

To achieve full TOT in India. Signup and view all the answers

What factor is seen as necessary for OEMs to understand their business operations in India?

They must establish manufacturing facilities locally. Signup and view all the answers

What major factor has caused some concerns in the supply chain?

Geopolitical conflict Signup and view all the answers

How has HAL managed to maintain operations despite disruptions?

By opening channels with Russia Signup and view all the answers

What changes are being made to the ALH's design?

Replacing aluminum control rods with steel rods Signup and view all the answers

What impact did the grounding of the ALH have on HAL's future order book?

A delay in expected orders for ALH and LCH Signup and view all the answers

What is HAL's primary interest according to the response?

Enhancing fleet serviceability Signup and view all the answers

What has been the effect of the COVID-19 disruptions on HAL's operations?

Normal operations without disruptions Signup and view all the answers

What payment issues were faced by HAL?

Delayed payments that have been sorted out Signup and view all the answers

What similarity do the ALH and LCH have in their designs?

Both have similar component structures Signup and view all the answers

What was the impact of the MiG-21 on HAL's financials?

It contributed around INR100 crores. Signup and view all the answers

Who expressed confidence about meeting investors' expectations?

Shri.C.B.Ananthakrishnan Signup and view all the answers

What role does Shri.C.B.Ananthakrishnan hold?

Director (Finance) and CFO Signup and view all the answers

What was the main topic addressed in the conference call?

Financial performance and growth prospects. Signup and view all the answers

What did Harshit Kapadia do at the end of the conference call?

Handed over closing comments. Signup and view all the answers

What has been HAL's performance trend over the last 4 to 5 years?

Consistent growth and performance. Signup and view all the answers

Who concluded the conference call?

The conference moderator Signup and view all the answers

What was highlighted about the orders in HAL's pipeline?

Much more visibility of orders is expected. Signup and view all the answers

What is the percentage of provisions that the IT department is trying to maintain?

7% Signup and view all the answers

What type of provisions have been created by the company for the current financial year?

Loan items from the Indian Airforce Signup and view all the answers

What is expected to happen to the provisions during the current financial year?

They will be withdrawn, leading to potential income Signup and view all the answers

What is Harshit Patel inquiring about concerning the MiG-21?

The future contributions of MiG-21 to overall ROH revenues Signup and view all the answers

According to C.B.Ananthakrishnan, what is the company's stance on the MiG-21 overhaul?

There will be no MiG-21 overhaul at HAL Signup and view all the answers

What is the expected impact of the MiG-21 on HAL's revenue in the fiscal year 2022-2023?

It will have no significant revenue impact Signup and view all the answers

What primary expense is the company preparing provisions for regarding the Indian Airforce?

Loan repayments Signup and view all the answers

What does the company expect regarding future provisions based on actual expenditure incurred?

There should be savings on provisions Signup and view all the answers

What is the estimated value of the order pipeline for Hindustan Aeronautics Limited (HAL) for FY '24?

INR48,000 crores Signup and view all the answers

Which engine accounts for the largest portion of HAL's order pipeline?

AL-31 engines Signup and view all the answers

How many ALH (Advanced Light Helicopter) units are included in the order pipeline?

25 Signup and view all the answers

What is the anticipated value of the RD-33 engines in the order pipeline?

INR4,500 crores Signup and view all the answers

What figure is associated with the anticipated 12 additional SU-30 units?

INR12,000 crores Signup and view all the answers

What is the expected order value for the light utility helicopters (LUH)?

INR2,500 crores Signup and view all the answers

How much is HAL projecting for the growth in their execution timeline?

14% to 15% Signup and view all the answers

Which of the following numbers reflects the order of the FP RD-33 engines?

80 Signup and view all the answers

Study Notes

Hindustan Aeronautics Limited (HAL) Q4 FY 23 Earnings Conference Call

Date: May 17, 2023
Host: Elara Securities (India) Private Limited
Management: C.B. Ananthakrishnan (Director Finance & CFO, Additional Charge of Chairman & Managing Director), Jayadeva E.P. (Director Operations & Additional Charge of Director HR), Shailesh Bansal (Company Secretary)
Key Financial Highlights (Q4FY23):
- Record revenue of INR 26,900 crores (vs INR 24,600 crores previous year)
- Profit after tax (PAT) growth of around 14%
- Earnings before interest, tax, depreciation, and amortization (EBITDA) at 31% of revenue (vs 25-26% long-term trend)
- Interest income of INR 900 crore (vs INR 400 crore previous year)
Order Book:
- Significant order book exceeding INR 82,000 crores
- INR 26,000 crore of orders liquidated in FY 22-23
- Fresh orders of INR 26,000 crore during the year
- Additional INR 18,000 crore for repair and overhaul expected
- Orders for 70 HTT-40s, 6 Dorniers, and PSLV from New Space India Limited totaling INR 9000 crores and INR 800 crores respectively
- Financial projections for FY24-25 include double-digit revenue growth, possibly 10%
- Further development and purchase of additional equipment expected to come in 6-10 months, totaling close to INR 48,000
Key Issues/Concerns Addressed:
- ALH grounding: 3 recent ALH accidents led to the grounding of the aircraft by the Army; though preliminary investigations have not led to a single cause, the focus on steel components as a precaution is significant
- LCA Mk 2: The project is progressing, but there are some outstanding issues, specifically with the Engine TOT contracts, and the schedule for deliveries is yet to be finalized
- Engine supply chain: HAL is diligently working to ensure uninterrupted supply of spares and to mitigate any supply chain issues, particularly if related to Russian sanctions
- Export Potential: HAL is actively engaging in discussions with countries in Algeria, Argentina, Indonesia, Philippines, Thailand, Middle East, Botswana, Thailand and Nigeria for potential export contracts
Key Strategies/Initiatives:
- Embracing Atmanirbharta (self-reliance): HAL is focused on using indigenous technologies and reducing reliance on imports
- Emphasis on indigenous design capabilities: HAL is working on improving its design capabilities and developing advanced aircraft

Conference Call - Additional Details

Conference Call hosted by: Elara Securities (India) Private Limited
Company Secretary & Compliance Officer: Shailesh Bansal
Details of Conference Call: Transcript of Q4FY23 results conference call, available on HAL's website
Address of Corporate Office of HAL provided

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Description

This quiz covers the key financial highlights from the Hindustan Aeronautics Limited (HAL) Q4 FY 23 earnings conference call. Test your knowledge on revenue growth, profit after tax, order book details, and other significant financial metrics discussed during the call.