(Reuters) -Hindustan Aeronautics Ltd (HAL) reported higher second-quarter profit on Wednesday, supported by strong order execution, though weaker operating margins dragged its shares down 3% after results.
The state-owned fighter jet maker’s consolidated net profit rose 10.5% to 16.69 billion rupees ($189.89 million) for the three months ended September 30.
India’s push for self-reliance and modernization in defense has lifted activity at contractors like HAL. The government allocated 6.81 trillion rupees in the union budget to the defense ministry and earmarked 1.8 trillion rupees for local procurement.
However, HAL reported earnings before interest, taxes, depreciation, and amortization margin of 23.50% in the quarter compared to 27.4% a year ago.
Total expenses increased 17.3%, driven by a 32.8% rise in the cost of materials consumed.
HAL had said earlier in May that it expects to keep EBITDA margin around 31% for the year.
During the quarter, HAL signed a contract with the defence ministry for the procurement of fighter jets worth more than 623.70 billion rupees and a technology transfer agreement with India’s space agency ISRO and other space related government entities.
Revenue rose 10.9% to 66.29 billion rupees.
Peer Bharat Electronics reported higher quarterly profit in late October.
($1 = 87.8950 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Nivedita Bhattacharjee )
