The selloff comes as investor anxiety intensifies over delivery timelines for the LCA Mk1A fighter jets and mounting competition from private sector rivals in India’s next-generation combat aircraft program.
In a statement issued today, HAL sought to reassure stakeholders on the status of its flagship Tejas program. “HAL confirms that five aircraft are fully ready for delivery, incorporating major contracted capabilities in accordance with the agreed specifications,” the company said.
However, the clarification revealed a critical bottleneck: “An additional nine aircraft have already been built and flown. Upon receipt of engines from GE, these aircraft will be made ready for delivery.”
The dependence on General Electric engine supplies has emerged as a key constraint, though HAL attempted to project confidence. “HAL has received five engines from GE as on date. The supply position from GE is positive, and the future delivery outlook aligns with HAL’s delivery plans,” the company stated.
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Addressing design concerns, HAL acknowledged: “All design and development issues identified are being addressed in an expedited manner. HAL is in active discussions with the Indian Air Force to deliver the aircraft at the earliest.”Despite the delivery challenges, HAL stood firm on its financial projections. “HAL assures that it will meet the guidance projected for the current Financial Year,” the company said.
On Wednesday, The Economic Times reported that HAL has been shut out of the race to develop India’s next-generation Advanced Multirole Combat Aircraft (AMCA).
Three private sector companies—Tata Advanced Systems Limited, Larsen & Toubro, and Bharat Forge—have been shortlisted after a technical evaluation of bids from seven Indian entities, sources said. The state-owned HAL was among the companies eliminated from contention.
The selection of the final winner is expected within three months, after the shortlisted companies submit detailed commercial proposals for manufacturing prototypes of the next-generation jets.
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The exclusion from the AMCA program marks a significant setback for HAL, raising questions about its competitiveness against leaner, more agile private sector players in India’s expanding defence manufacturing landscape. The twin pressures of delivery delays on existing programs and losing ground on future contracts have sparked the sharp correction in HAL’s stock, which has emerged as a bellwether for India’s defence sector ambitions.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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