Hindustan Aeronautics Limited (HAL) has officially amended its contract with the Indian Air Force (IAF) for the supply of Light Combat Aircraft (LCA) Tejas Mk1 Final Operational Clearance (FOC) fighter jets. The original contract, signed in December 2010, was valued at ₹5,989.39 crore. However, due to changes in the delivery schedule, the contract has now been revised to ₹6,542.20 crore.
HAL confirmed the revision in a regulatory filing, highlighting the strategic importance of the Tejas jets in strengthening the IAF’s fleet.
Tejas Mk1A: Advancing India’s Indigenous Fighter Technology
The Tejas aircraft is a domestically developed, multi-role fighter jet designed for air combat, offensive support, reconnaissance, and anti-ship operations. The Tejas Mk1A variant features cutting-edge technology, including:
- Active Electronically Scanned Array (AESA) Radar for superior target tracking.
- Beyond Visual Range (BVR) missile capability for long-range combat.
- Electronic Warfare (EW) Suite for enhanced survivability.
- Air-to-Air Refuelling (AAR) to extend operational range.
This procurement falls under the “Buy (Indian-Indigenously Designed, Developed, and Manufactured)” category. The indigenous content in Tejas currently stands at 50%, with plans to increase it to 60% by the programme’s completion. Of the 344 components used in the aircraft, 250 are sourced from Indian manufacturers.
GE Aerospace Delivers First Engine for Tejas Mk1A
A significant milestone in the Tejas programme was the delivery of the first of 99 F404-IN20 engines by GE Aerospace to HAL. These engines are tailored for India’s single-engine fighter programme and feature a high-thrust design, advanced turbine blades, and a modified high-flow fan to meet the IAF’s operational needs.
GE Aerospace expressed its commitment to supporting India’s fighter jet development, stating, “This is an important step in our 40-year partnership with HAL and in strengthening India’s defence manufacturing capabilities.”
Challenges and Delays in Tejas Mk1A Delivery
Despite these advancements, the Tejas Mk1A programme has faced setbacks. In 2021, the Indian Defence Ministry signed a ₹48,000 crore deal for 83 Tejas Mk1A jets, with deliveries initially planned for March 2024. However, HAL has yet to deliver a single aircraft due to project-related challenges.
One major hurdle was restarting the F404-IN20 engine production line after five years, further complicated by the COVID-19 pandemic. GE Aerospace acknowledged the difficulty, stating, “Restarting a jet engine production line is a complex task, especially in a post-pandemic environment.”
With engine supplies now in place, HAL is expected to ramp up production to meet the IAF’s modernisation goals.
HAL’s Market Performance and Future Outlook
Despite production delays, HAL’s financial position remains strong. On March 27, HAL shares closed at ₹4,170 on the NSE, with a market capitalisation of ₹2.78 lakh crore. The stock gained 7.5% in the last five days and surged 28.6% over the past month.
In Q3 FY2024, HAL reported a net profit of ₹1,432.60 crore, a 14.28% increase from the previous year. Revenue from operations also grew by 15%, reaching ₹6,956.93 crore.
As a key player in India’s defence sector, HAL is poised for growth with the Tejas production ramp-up and upcoming defence contracts. The next few months will be critical in determining whether HAL can meet its revised delivery schedules and establish Tejas as India’s premier indigenous fighter jet.
