Hind.Aeronautics Q1 FY27 Results (NSE: HAL)
Signal: Margin expansion
The read
The quarter shows an operating inflection versus Q1FY26: revenue grew 14.4%, EBITDA grew 19.6% and margin reached 44%, but the 5.2 percentage-point EBITDA-versus-revenue growth gap does not meet the operating-leverage threshold, while ₹90,024 lakh of other income contributed 42.4% of PBT and FPQ revenue was recognised using unfinalised 2024-25 prices without escalation.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,515.17 Cr | 14.4% | -60.4% |
| EBIT | ₹2,123.07 Cr | 15.1% | |
| Net profit | ₹1,589.68 Cr | 14.9% | |
| EPS | ₹23.77 | 14.9% | |
| EBIT margin | 44% |
P&L walk
Consolidated revenue increased 14.4% YoY while EBITDA increased 19.6% and EBITDA margin reached 44%; employee cost rose 10.4%, but PAT quality is weaker because other income of ₹90,024 lakh represented 42.4% of PBT.
Segments
No operating-segment table was disclosed because defence-production government companies are exempted from Ind AS 108; consolidated PAT exceeded standalone PAT by only ₹907 lakh.
Key positives
- Consolidated revenue rose 14.4% YoY to ₹5,51,517 lakh and EBITDA rose 19.6% to ₹2,42,701 lakh, with EBITDA margin expanding to 44%.
- Employee cost grew 10.4% YoY, below revenue growth of 14.4%, providing some fixed-cost support despite the gratuity comparability issue.
- EPS rose 14.9% YoY to ₹23.77, fully tracking PAT growth and indicating no material dilution.
Key concerns
- Other income of ₹90,024 lakh represented 42.4% of consolidated PBT, making the 14.9% PAT growth less representative of core operating earnings.
- Gross margin compressed approximately 270bps YoY to 65.3% despite raw-material cost declining to 50.4% of revenue from 65.6%; the filing does not disclose the driver.
- FPQ sales for Q1FY27 were provisionally recognised using 2024-25 prices without escalation because the fourth PPRC remains unfinished, leaving potential future price recognition uncertainty.
Earnings quality: includes non-operating other income
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