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* Ministry of Defence has signed a contract with HAL for 97 LCA Mk-1A aircraft, at a cost exceeding INR 62,370 Cr

* Deliveries are slated to begin in 2027-28 and complete over six years

* The aircraft will carry ~64% indigenous content, integrating advanced home-grown systems (e.g. UTTAM AESA radar, Swayam Raksha Kavach, control surface actuators)

* The vendor base comprises ~105 Indian companies contributing components, and projected employment (direct + indirect) is ~11,750 jobs per year over the six-year span.

* With this new order, the company order book stands at INR 2,516 Bn, which translate to 8.1x of FY25 revenue.

* We currently have a BUY rating on "HAL" with a TP of INR 5,570.

* Beneficiaries: HAL, BEL, BDL, Astra Microwave

* Our view: Even though GE engine supplies are facing delays, the MoD’s decision to move ahead with the LCA Mk-1A order reflects strong confidence in Indian manufacturing capabilities. We see this as a positive signal not just for HAL, but for the broader defence ecosystem, as it underlines the government’s commitment to push indigenisation despite external dependencies. In our opinion, this reaffirms the long-term visibility of domestic defence programs and should lift sentiment across the sector.

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