- 03 Sep 2024
- ICICIdirect Research
GOVERNMENT CLEARS PLAN TO BUY SUKHOI JET ENGINES FROM HAL
News: Cabinet Committee on Security (CCS) has cleared a Rs 26,000 crore deal to acquire 240 AL-31FP aero-engines for the Sukhoi-30MKI fighter jets. These engines will be manufactured by Hindustan Aeronautics (HAL) and will have indigenous content of over 54% and will be delivered over a period of eight years.
View: Procurement of new AL-31 FP aero-engines is a part of Su-30 MKI upgradation program which also includes replacement of radars, avionics and other electronic systems. At present, IAF has 259 twin-engine Su-30 MKI in service and these 240 engines will be replaced in initial 120 fighter jets. Considering this contract, HAL’s order backlog is estimated to be at ~Rs 1.2 lakh crore (3.9x TTM revenue), providing healthy revenue visibility. Order pipeline remains robust (~Rs 1.5 lakh crore worth of contracts are expected to be placed with HAL in the coming 1.5-3 years which includes key projects like 97 additional LCA MK1A fighters, additional 12 Su-30 MKI fighters, 156 light combat helicopters, 60 naval utility helicopters etc.
Impact: Positive