Hindustan Aeronautics (HAL) Q4 09/10 earnings summary

Executive summary

• FY10 turnover reached a record Rs 11,456.70 crore, up 10.45% YoY; PBT rose 15.14% to Rs 2,688.43 crore and PAT reached Rs 1,967.41 crore.

• Record net profit and dividend were reported; the proposed FY10 dividend was Rs 32.65 per share, with total outflow including dividend tax of Rs 460.35 crore.

Financial highlights

• Net sales were Rs 11,455.82 crore versus Rs 10,370.70 crore in FY09; PAT was Rs 1,967.41 crore versus Rs 1,739.86 crore.

• Exports declined to Rs 204.67 crore from Rs 436.58 crore; domestic sales increased to Rs 11,252.03 crore from Rs 9,936.80 crore.

• R&D expenditure rose to Rs 832.12 crore from Rs 674.78 crore; cash and bank balances, including short-term deposits, were Rs 18,657.64 crore at year-end.

Outlook and guidance

• Order book was ~Rs 80,000 crore as stated in the Chairman’s outlook; firm orders for aircraft, helicopters, engines and accessories were Rs 64,000 crore.

• Production volumes were expected to nearly double versus the prior couple of years; capacity, supply-chain productivity and ERP integration were priorities.

• Performance Based Logistics services were planned initially for Hawk, then for ALH and IJT fleets; facility upgrades, lean engineering and cost reduction remained priorities.

• MTA implementation awaited Government approval; FGFA design work was scheduled to launch in FY11, while HTT-40 development was planned over 60 months.