HAL Q1 Results: Shares edge higher after Q1 results; margins surprise despite 4% profit dip

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HAL Q1 Results: Shares of Hindustan Aeronautics Ltd. (HAL) recovered in trade on Tuesday after the state-owned defence major reported its earnings for the quarter ended June 30, 2025. While net profit declined 4 per cent year-on-year to Rs 1,377 crore, the figure came in higher than analysts’ expectations, with operating margins surprising on the upside.

According to a Zee Business research estimate ahead of the earnings, HAL was expected to post a consolidated net profit of Rs 1,287.3 crore, which implied a 10.4 per cent YoY decline. The actual net profit of Rs 1,377 crore marked a smaller decline of just 4 per cent, beating the Street’s projection.

HAL Q1 Results: Revenue Misses Estimates; Margins Deliver a Surprise

Revenue from operations stood at Rs 4,819 crore, up 11 per cent YoY — slightly below the Rs 4,960.6 crore expected by analysts, who had forecast a 14.1 per cent growth.

However, the company outperformed on the EBITDA front, posting Rs 1,284 crore in operating profit for the quarter — up nearly 30 per cent YoY, and well above the estimated Rs 1,144.8 crore. EBITDA margin expanded sharply to 26.7 per cent, far exceeding the expected 23% and rising from 22.8 per cent in the same quarter last year.

The margin expansion was driven by continued execution of HAL’s Rs 1.89 lakh crore order book and a higher contribution from the repairs and overhaul (ROH) segment.

What Investors Are Watching

While analysts had anticipated support from HAL’s growing order book, easing supply chain issues, and rising indigenisation push, the actual margin outperformance signals stronger operational efficiency than previously expected.

Looking ahead, investors are focused on:

Delivery timelines for Tejas MK1A

Progress on the Su-30 avionics upgrade programme

Updates on working capital cycle and cash flows