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Indian Air Force is likely to meet its target of 42 squadrons by 2040 with this 97 LCA Mark 1A order

ICICIdirect Research 26 Sep 2025 DISCLAIMER

With this new order, Indian Air Force is likely to meet its target of 42 squadrons by 2040.
With this 97 LAC Mark 1A new order, the government has okayed a total of 180 LCA MK1As (10 squadrons). Along with it, the expected induction of ~6 squadrons of Tejas Mk2 from 2030 onwards, 7-8 squadrons of AMCA from 2033 onwards and 6-8 squadrons under MRFA (Multi-Role Fighter Aircraft) route.
Deal for the GE-404 engines, which will be used in these aircrafts, is also expected to be signed with GE by Oct 2025.
HAL is expected to be the biggest beneficiary as it now focuses on increasing production capacity from 24 - 30 aircrafts annually. The management targets to deliver all 180 LCA MK1A aircraft by 2033.
Along with HAL, other companies such as Bharat Electronics (BEL), Astra Microwave, Data patterns are also expected to gain from this contract as they will be involved in supplying electronic systems/sub-systems like avionics, radars, electronic warfare systems etc
Dynamatic Technologies that provides front fuselage for the current backlog (83 Mark 1A) may also likely contribute towards structural assemblies going ahead. Bharat Dynamics (BDL) could see demand linked to missiles integrated with the Tejas fleet
We remain positive on the defence sector, considering the strong focus on increasing capital outlay for indigenised platforms and reducing procurement timelines of these platforms. This gives strong visibility on orders inflows in coming years and faster execution
We recommend HAL (target price of 6100), BEL (target price of 450), Astra Microwave (target price of 1320), Data Patterns (target price of 3130), and Dynamatic Technologies (target price of 8400), Midhani (target price 530) and Premier Explosives (target price of 680)

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