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🚁 HAL’s ₹62,700 Cr LCH Deal: India’s Defence Sector Enters a New Orbit

Lesson 15/21 | Study Time: 10 Min
🚁 HAL’s ₹62,700 Cr LCH Deal: India’s Defence Sector Enters a New Orbit

🚁 HAL’s ₹62,700 Cr LCH Deal: India’s Defence Sector Enters a New Orbit

By Piyush Patel, 29th March 2025

India’s journey toward strategic defence self-reliance just took a massive leap forward.

On March 28, 2025, the Ministry of Defence (MoD) signed two historic contracts with Hindustan Aeronautics Limited (HAL) worth a staggering ₹62,700 crore. The deal covers the procurement of 156 Light Combat Helicopters (LCH), Prachand, for the Indian Armed Forces. This landmark announcement not only marks a monumental win for HAL but also sets the stage for a paradigm shift in India’s defence manufacturing ecosystem.


📜 The Deal in Detail

The order is split as follows:

  • 66 LCHs for the Indian Air Force

  • 90 LCHs for the Indian Army

Deliveries will begin from the third year (FY27-28) and extend over five years, ensuring robust order book visibility through FY32-33.

Alongside this, the MoD also inked a separate deal with Metrea Management to wet lease one KC-135 Flight Refuelling Aircraft, a first-of-its-kind move by the Indian Air Force to enhance aerial refuelling training for IAF and Navy pilots.


🚁 Prachand: The Indigenous Powerhouse

The LCH Prachand is India’s first indigenously designed and developed combat helicopter, built to operate at high altitudes above 5,000 meters – making it ideal for India’s challenging border terrain.

Noteworthy Features:

  • Advanced night-fighting and precision attack capabilities

  • 65%+ indigenous content, with many components manufactured by Indian MSMEs

  • Participation of over 250 domestic companies, fueling local innovation

  • Estimated creation of 8,500+ direct & indirect jobs

In essence, this is not just a helicopter; it is a symbol of India's defence ambitions and manufacturing maturity.


📈 What This Means for HAL Investors

The ₹62,700 crore order is a game-changer for HAL, translating to over 3x its FY24 annual revenue. Here’s why this deal puts HAL on every serious investor’s radar:

🔹 Long-Term Revenue Visibility

The structured 5-year delivery schedule provides stable cash flows and visibility for nearly a decade.

🔹 Improved Margins Through Scale

Increased indigenization and production scale will help HAL leverage operating efficiencies, potentially boosting margins.

🔹 Strategic Positioning

HAL is emerging as a key pillar in India’s Atmanirbhar Bharat mission, giving it both financial strength and policy tailwinds.

🔹 Global Opportunity

With the LCH’s combat-readiness and high-altitude performance proven, export prospects to other mountainous or border-sensitive regions are now within reach.


🔍 Broader Impact on the Defence Ecosystem

This is not just HAL’s win. It’s a major shot in the arm for the entire Indian defence manufacturing sector.

🧩 MSME & Supply Chain Boost

The involvement of 250+ MSMEs means a vibrant and distributed manufacturing ecosystem is now being built around HAL.

🛡️ Sector Confidence

This deal is part of 193 defence contracts signed in FY25 alone, worth over ₹2.09 lakh crore – nearly double the previous year. A resounding statement of India’s defence intent.

🌐 Diplomacy Through Defence

India's rising capabilities in indigenously built platforms can evolve into strategic defence exports, boosting both soft power and trade.


🧠 Investor Take: The Road Ahead

With this & many other deals we saw, HAL/BEL and other Defence sector companies move beyond being just a PSU – it is becoming a strategic defence enabler.

As an investor, I believe HAL/BEL now sits on a multi-year growth trajectory powered by:

  • Execution of a robust order pipeline

  • Operating leverage

  • Defence sector tailwinds

  • Export potential of indigenous platforms

For long-term investors, HAL/BEL and other OEM’s offer a rare mix of visibility, national importance, and upside optionality in global defence play.


✍️ Final Thoughts

The Prachand deal is more than just a contract. It represents India’s ascent as a self-reliant defence power, and HAL is at the heart of this journey.

"In Defence OEM’s, we’re not just investing in a company – we’re investing in India’s sovereignty and its future."


Piyush Patel

Piyush Patel

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