Hindustan Aeronautics shares gain 5% on securing ₹26,000 crore order for Su-30 MKI aircraft engines

Shares of Hindustan Aeronautics Ltd (HAL) surged 5% to hit an intraday high of ₹4,925 apiece on the NSE on Tuesday, September 3, after the Cabinet Committee on Security (CCS) approved the procurement of 240 AL-31FP engines for the Su-30 MKI aircraft of the Indian Air Force (IAF) from HAL.

The CCS said in a release on September 2 that it has approved a proposal from Hindustan Aeronautics Limited (HAL) to procure 240 aero-engines (AL-31FP) for the Indian Air Force's (IAF) Su-30 MKI aircraft under the Buy (Indian) category.

The engines will be procured for more than ₹26,000 crore, inclusive of all taxes and duties. The official release also mentioned that the delivery of these aero-engines would start after one year and would be completed over eight years. The engines will have over 54% indigenous content and will be manufactured at the Koraput division of HAL. Su-30 MKI is one of the most powerful and strategically significant fleets of IAF.

Earlier on August 30, HAL informed the exchanges that it has signed an airframer contract with SAFHAL Helicopter Engines Pvt Ltd (SAFHAL) for commencing joint design, development, manufacture, supply and support of a high-power engine named 'Aravalli' for use in 13-ton Medium Lift class, Indian Multi-Role Helicopter (IMRH) and the Deck-Based Multi-Role Helicopter (DBMRH).

SAFHAL is a joint venture between Safran Helicopter Engines SAS and HAL dedicated to the design, development, production, sales, and support of new-generation helicopter engines in India.

HAL shares have zoomed over 144% in the last year on the NSE. The public sector company’s stock has given year-to-date (YTD) returns of over 72%, and in the last six months, it has gained over 48%. In the last one-month period, it has climbed over 2%.

HAL shares were trading at ₹4,817 apiece on the NSE, up by 2.75% at 9:45 am.