Hindustan Aeronautics (HAL) Q4 13/14 earnings summary

Executive summary

• FY2013-14 turnover reached a record ₹15,127.94 crore, up 5.61% YoY; PBT rose 2.32% to ₹3,577.69 crore, while PAT fell to ₹2,692.52 crore.

• Production included 60 aircraft and helicopters, alongside engines and accessories; the year’s milestones included Tejas IOC and the start of series production.

• The MoU performance rating was “Excellent”; exports, indigenisation, R&D and new aerospace programmes remained key priorities.

Financial highlights

• Total sales were ₹15,127.94 crore vs ₹14,323.63 crore; export sales increased to ₹440.04 crore from ₹382.82 crore.

• PBT was ₹3,577.69 crore vs ₹3,496.97 crore; PAT was ₹2,692.52 crore vs ₹2,996.91 crore, with tax provision at ₹885.17 crore vs ₹500.06 crore.

• Gross margin increased to ₹4,181.17 crore from ₹4,098.30 crore; net worth rose to ₹15,014.64 crore from ₹13,378.19 crore.

• R&D expenditure was ₹1,083.26 crore, or 7.2% of turnover, vs ₹1,948.95 crore in FY2012-13.

• Export orders booked during the year were ₹357 crore; sales per employee rose to ₹47.12 lakh from ₹43.88 lakh.

Outlook and guidance

• Defence modernisation, indigenisation, offset obligations and rising civil aviation demand were identified as growth opportunities; Indian civil aviation was forecast to grow at 10.1% CAGR, with airline fleets expected to double by 2020.

• A four-pillar strategy focused on technology, business model transformation, operations and marketing, including civil aviation/UAV diversification, vendor development and export growth.

• 10% of operating profit was earmarked as an R&D corpus; 111 technology projects were identified, and modernisation and expansion plans were set for implementation over 3–4 years.

• FY2014-15 defence allocation was ₹2,29,000 crore, up 12.25% YoY; 36% was assigned to capital acquisitions, while personnel costs exceeded 50% of the allocation.