Hindustan Aeronautics Limited (NSE: HAL) Q4 FY23 earnings concall dated May. 17, 2023
Corporate Participants:
Harshit Kapadia — Vice President
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Jayadeva, E.P. — Director Operation
Analysts:
Amit Dixit — ICICI Securities — Analyst
Charanjit Singh — DSP Mutual Fund — Analyst
Aditya — Securities Investment Management Company — Analyst
Harshit Patel — Equirus Securities — Analyst
Umesh Raut — PhillipCapital — Analyst
Hardik Jain — ISJ Private Securities — Analyst
Jonas Bhutta — Birla Mutual Funds — Analyst
Mahesh Bendre — LIC Mutual Fund — Analyst
Viraj — Jupiter Financial — Analyst
Vivek N. — Shanti — Analyst
Shirom Kapur — Prabhudas Lilladher — Analyst
Bhavin Vithlani — SBI Mutual Funds — Analyst
Amit Bhinde — Morgan Stanley — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY’23 Earnings Conference Call of Hindustan Aeronautics hosted by Elara Securities India Private Limited. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshit Kapadia from Elara Securities India Private Limited. Please go ahead, sir.
Harshit Kapadia — Vice President
Thank you, Kelvin. Good evening, everyone. On behalf of Elara Securities, we welcome you all for the Q4 FY’22-’23 conference call of Hindustan Aeronautics Limited. I take this opportunity to welcome the management of Hindustan Aeronautics, represented by Shri. C. B. Ananthakrishnan, Director of Finance and CEO with additional charge of Chairman and Managing Director; Shri. Jayadeva, E.P., Director Operation with additional charge of Director HR along with the team members.
We will begin the call with a brief overview by the management followed by Q&A session. I will now hand over the call to Ananthakrishnan sir, for his opening remarks, Over to you sir. Thank you. Good afternoon to all of you. And we welcome to fourth quarter financial year results 2023 earnings call. First and foremost, I express my sincere gratitude to all of you for being present today to interact with us and to get all the clarifications on the sort of future prospects of HAL. I have with me Mr. E.P. Jayadeva, Director Operations who is also holding the additional charge of Director HR; Company Secretary, Mr. Bansal and all other senior officials. As you are aware, we have declared our financial results for the FY22-’23 and this call is intended to clarify all the questions you have on the company’s performance. The financial year, as you’re all aware, has been a very eventful year as far as HAL is concerned. In fact, if you recall at the beginning of the year, we started the year with sort of a revenue deficit of almost INR6,000 crores between the executable order front-end and the revenue target for the year. In fact, the manufacturing orders were all getting depleted. So we were all wondering as to the INR6,000 crores we were — I mean how to meet this gap. The year was even more challenging, considering the business environment, amidst our global economic uncertainties, certain limited supply-chain disruptions and other challenging reasons. However, we have shown some sort of a resilience and adaptability navigating these challenges and could rather post a very strong set of numbers, which we will discuss subsequently. FY 22’23 in general and second-half of the year, in particular, witnessed some significant events. As you are aware, the Honorable Prime Minister of India has dedicated our greenfield helicopter project, one of the biggest, I mean in the country, at Tumakuru to the nation. He also on that occasion unveiled the Light Utility Helicopter of HAL designed and developed by HAL. Again, in a major boost to indigenization, our Honorable Prime Minister, has unveiled the HTT-40 at DefExpo ’22 during October ’22. HAL also has concluded on that occasion 70 numbers of HTT trainers valued at around INR7,000 crores approximately. HAL-L&T consortium again has backed INR860 crore contract for end-to-end realization of this five polar satellite launch vehicles PSLV from the NewSpace India Limited. This, I have been mentioning because this is one of the major forays of HAL into the aerospace industry, especially the space sector in collaboration with the private industry for delivering the satellites to the ISRO, Indian Space Research Organization. Now, as far as the financial performance are concerned, we had a very robust financial results being posted in last FY’22-’23. Our revenue, we have reached record revenue of almost INR26,900 crores as against INR24,600 crores in the previous year, registering a growth of almost 9% plus. In fact, our initial guidance, we have always been maintaining at 8% and we said that we will reach a double-digit growth from FY’24-’25 onwards. And in fact, I would say with confidence, we are progressing quite well so that we could achieve a revenue target of nine point, I mean, growth of 9.37% in the last financial year. This year would be no different from that. We will be further strengthening that. And as we have indicated in last call, we will be able to reach a double-digit growth of 10%, from ’24’25 onwards. The manufacturing segment, yes, there has been — it has remained subdued owing to certain lower platforms available for execution. However, the shortfall, we could make go through the execution of the repair and overall orders. And this trend is expected to continue in the current financial year as well. And from the next year onwards, the manufacturing numbers will start picking up once we start delivering the platforms, basically LCA Mk-1A. Similarly, during the, I mean, from ’24-’25 onwards, apart from our LCA Mk-1A. we will also expect significant improvement towards the delivery of our HTT 40 aircraft, which is expected to commence from September ’24 onwards. And ’25, additional ALH and AL-31FP, which is a Sukhoi engine contracts once it is — once we start executing that. PBT has registered an increase of almost 24%, it has grown to INR6,500 crores approximately from INR5,231 crores in the previous financial year. Basically, one of the reasons were seen that the increase in the interest income, which has also accrued towards on account of two regions. One is the healthy cash balance and the second one is the refund of the long disputed Income Tax distribute, which was there with the department, which also got settled in the last year. The upward trend of the interest rates have helped the company on the non-operating income front. We have received an interest income of almost INR900 crore plus come the surplus balances as against almost approximately INR400 crores in the previous year. In addition, in the current year, we have also received an interest. As I’ve indicated yearly earlier, our interest of almost INR560 crores from the Department — Income Tax Department on account of the refund which were, I guess, disputed amounts which are lying with them. Incidentally. I would also like to take this opportunity to inform you that we have settled this long-standing dispute with the Income Tax Department and have received almost INR2,451 crores of tax refund and INR830 crores as interest from the department, the last two years, that is FY’22-FY’23 and FY’21-FY’22. This has settled the tax dispute with the Department for all the financial years, starting from 2008 onwards to 2015-2016. We are quite comfortable now having settled all the disputes with them. In line with this increase in the PBT and the PAT has also comparatively improved. The PAT growth also has been quite substantial at around 14%. In fact, you would have — I have seen that many people have observed that there is a decline in PAT on the fourth-quarter of ’22-’23, as compared to the corresponding period of ’21-’22. We would like to clarify here, the fourth-quarter ’22, the real profit-after-tax has not come down, it is only because of certain adjustments in income tax refund, which was at a higher, the refund, which we have got in the last fourth-quarter was slightly higher at INR1,200 crores as against some INR700 crores during the previous fourth-quarter. So if you adjust for the same, the PAT has grown at around 10%, even in the fourth-quarter. This is purely an operating PAT, has grown at around 10%. EBITDA for the year has stood at around 31% of the revenues as compared to the long-term trend of around 25% to 26%. This again, I would like to clarify that may not be sustainable at 31%. We will settle down at around the 26%, 27%. This increase in the EBITDA for the current financial year is mainly on account of certain amortization, which we have got in the current financial year of almost close to INR600 crores on account of the HTT contract, which we have finalized in the last year. Similarly, the dividend, on dividend front, I think we are quite — I we’ve been rewarding to the all the investors. We have paid one final dividend of last financial year ’21-’22 and two interim dividends, all totaling to almost INR50 rupees per share, which is — which works upto almost 500% of the face value of INR10 per share. On the order book, you will not be interested quite as we have always been maintaining, in spite — in fact in the last earning call also, we have mentioned at around INR82,000 crores to INR83,000 crores. In spite of liquidating the orders, still the order book remains at a healthy INR82,000 crores approximately. We have almost liquidated INR26,000 crores of orders in the last financial year. This was also possible because of fresh order accretion of almost INR26,000 crores during the year. Major orders, as I have already indicated, 70 HTT — 70 numbers of HTT 40 and six Dornier, I mean, all valued at almost INR9,000 crores and INR800 crores of PSLV from NewSpace India Limited we have got. All these had added to the order book position. And balance order flow, as you are aware, that repair and overall there has been an always been an accretion to the order book and almost INR18,000 crores of [Technical Issues] order accrues with HAL. Again, the fresh orders from — we are expecting the new orders to come through from 25 numbers of Advanced Light Helicopter DHRUV, 12 numbers of LUH, Light Utility Helicopter. And again, the engines for the AL-31FP and RD-33 engines for mixed series of aircraft. So all these cost negotiations have all been completed, and these are all in the advanced stages of completion. So we expect an annual, I mean, estimated order value of almost INR48,000 crores to get concluded in the next — in the coming financial year, which means within a timespan of six to 10 months. Further, on the maritime UHM, maritime helicopter 16 numbers, AoN has already been approved and coastguard nine helicopters also AoN [Indecipherable], that is Acceptance of Necessity, which means that there is a very clear visibility towards these orders for HAL in the next two to three years timeframe. As far as the utility helicopter, the UHM maritime helicopter is concerned, we will be receiving a sanction for the first — initially for the sanction will be for the design and development and subsequently, it will be followed by the procurement order. Similarly, we have completed the LCS, that is Light Combat Helicopters 15 numbers and we expect bigger order from this on Light Combat Helicopters. We are in advanced stages of negotiations with the vendor — they are — I mean with the customer. We are identifying the additional systems, which are required for the Light Combat Helicopter and once it is getting finalized, the AoN also will be getting approved and this is also expected at around INR45,000 crores, including the optional and roll equipment there. This will be an anticipated order. This again, there is some visibility, which will happen in the next two to three year timeframe. In addition, we also anticipate the LUH, Light Utility Helicopter of additional order of almost 175 numbers, which should — these are all anticipated, which should — for which visibility is there, but the AoNs and other things. The process will start subsequently. Similarly, the additional HTT-40 and upgrades from Dornier aircrafts. So once these orders have fructified, the order book position further gets strengthened and put us on a higher trajectory of growth, which we have been promising to achieve a double-digit growth from ’24’25 onwards. We are also trying to take some very significant efforts to promote our International business. With a wide range of indigenous platforms, we are aggressively pursuing some of the export lease from the country, various countries. we have received the export lease — from Algeria, Argentina, Indonesia, Philippines, Thailand, Middle-East, and we have been quite involved in these various discussions and we are awaiting one breakthrough order to happen, which we are very positive it should happen in the next one year timeframe. HAL also has been the — one of the major beneficiaries of this Government of India AatmaNirbharatha and self-reliance initiatives. Now, many of our platforms and systems, which HAL is manufacturing are appearing in the positive indigenization, which should mean that the exports will not be there — sorry imports will not be there, and the HAL will the production agency and supplying agency for these platforms. It will help HAL in securing fresh orders and also fulfil the requirement of the defense forces within the framework of the country. These efforts will not only benefit HAL, but also to uplift, I mean, the Indian ecosystem of various vendors and suppliers. To conclude. I will not take much time. I would say that we are committed towards excellence and will continue to propel the nation towards the AatmaNirbharatha in defense and aerospace manufacturing through our indigenous design capabilities, which we have developed over a period of almost seven decades. I think all in all, the future of HAL appears quite bright and with all these initiatives towards indigenization and self reliance, we are quite sure that the growth trajectory of HAL is very sound and strong. I think with this. I will open the floor for questions and clarifications, which you will have. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Amit Dixit from ICICI Securities. Please go-ahead, sir.
Amit Dixit — ICICI Securities — Analyst
Yeah, hi, good evening, everyone, and thanks for this opportunity. Congratulations for a good set of numbers. I have two questions. The first one pertains to actually LCA Mk1A. In certain section of media, it has appeared that this project could be delayed by a few months. So just wanted to get your thoughts on when we can expect LCA Mk1A to be executed and when can you expect the manufacturing to start [Technical Issues] to start.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah, see as per the contracted delivery schedule, the delivery should come on from February ’24 onwards. And in the current financial year, we are supposed to deliver three number, one fighter and two trainers — three aircrafts during the current financial year. And we are on the track. We are on track. In fact, we — it also involves — the Mk1A also involves the certification of many of the systems, which are added onto LCA Mk1A and we are — along with the ADA, there is a Aeronautical Development Agency — we are working towards achieving these certification processes well in time so that the deliveries also will happen.
As of now, even though there are — we are working on a very tight schedule, with all these many of the systems to get certified. We have already started built of the aircraft and the aircraft structure should become available, which will by June or — by before — in the next three to four months. And after that, this systems also, as and when it gets certified, it will get fitted into that and we will be in a position to have the ground test and things like that happening in the next eight to 10 months timeframe.
So we are working towards meeting the delivery timelines. Probably even if there are going to be some sort of delays, it may not be very significant. It may be — we are confident that we should be able to work on those delays and see that these aircrafts are delivered as for the contracted delivery schedule.
Amit Dixit — ICICI Securities — Analyst
Sir, just to follow-up on this, what is the schedule like? How many are you expected to deliver in FY’25, FY’26, FY’27.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
As per the contracted delivery schedule, it is 16 number starting from ’24-’25 onwards. Three to be there in the current financial year, and 16 are to be delivered every year, peak load of delivery is 16 numbers. In fact, you may be aware that recently we have also — rather started putting up a third line in Nasik division to see that how these deliveries could be expedited. While 16 numbers, we will be able to make from our facilities in Bangalore, we wanted to increase this number so that the deliveries could be at a faster rate, and we will be in a position to conclude the complete delivery within a year before what has been contracted to the delivery schedule.
So as I’ve said, even though there could be some, I mean, even if, one or two aircrafts we fall short in the current financial year, we will be able to make those with our additional capacities in the subsequent years. Wonderful, sir. The second question is essentially on the order book accretion. You had mentioned that in terms of manufacturing, there is a possibility of what INR48,000 crores order book accretion in the year. Can enumerate the similar number for ROH and development also. Yeah, ROH, we expect the order book accretion year-on year will be on an average, it should be around INR18,000 crores, INR17,000 to INR18,000 crores. So that will only keep increasing. And as of now, we maintain an average order book of I mean towards ROH, it should be, I mean on an annual basis INR18,000 crores should be the attrition.
Amit Dixit — ICICI Securities — Analyst
And development.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
-Development order, sir, I mean that is — that depends again on certain sanctions, which will come through. We are also not waiting for the development orders to come through. We are also funding it internally from our resources and as and when it comes through, we will be able to take it on. But, we are sure that development, you know that IMRH program will be coming through when your LCH Phase-II systems when it is going to be there, this will be an addition to development orders.
And similarly, certain portion of pure AMCA portion also will come through. UHM will be there. UHM sanctions will be there. So all these would be and the development orders also will substantially increase. But as of now, we will not be able to commit the number on development orders because we have started discussing with them right now.
Amit Dixit — ICICI Securities — Analyst
But just a follow-up on this ROH, what is the execution period like INR17,000 crores to INR18,000 crores.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
That is on an year-on-year basis, our accretion — I mean our execution, the timeframe is within one year, 12 months period.
Amit Dixit — ICICI Securities — Analyst
Wonderful, sir. I have few other questions, I’ll get back in the queue. Thanks and all the best.
Operator
Thank you. [Operator Instructions].The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go-ahead, sir.
Charanjit Singh — DSP Mutual Fund — Analyst
Yeah, hello sir. First of all, congratulations on good set of numbers. And sir, my first question is that in terms of this engine framework contract, which we have been talking about for a long-time, at what stage it is and do we see this getting finalized in the next six months timeframe, because then you know the election and that code of conduct, can it impact some of the order inflow finalizations what we are expecting. That’s my first question.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Which engine framework you are talking about?
Charanjit Singh — DSP Mutual Fund — Analyst
Sir, AL -31, AL-31.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
AL-31, the 240 number of engines which we are, I mean, already in the advanced stages of negotiations. We have completed the CMCs also. That is contract negotiations has been over with the customer. Now, the process is on for putting up the paper for CCS approval and we are sure that we’ll be able to get these order in the current financial year. It is quite in advanced-stage. We will be able to conclude it within the next six months-to eight months timeframe.
Charanjit Singh — DSP Mutual Fund — Analyst
And sir, what will be the total value of this order?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Total value of this order should be around INR26,000 crores.
Charanjit Singh — DSP Mutual Fund — Analyst
Okay, sir. Sir, the other question is on the export side. You’ve touched upon that there is some opportunity which is emerging. So if you can just give us more details in terms of what kind of platform, what we are looking at in the export market. And we had earlier also participated in, you know, one of the international export orders. So what is giving us the confidence and what could be the quantum of this order when we are looking at exports potential?
Jayadeva, E.P. — Director Operation
We are working on countries like Philippines, Argentina, Egypt, Sri Lanka, Maldives, Botswana, Thailand and Nigeria on fixed wing or LCA, as well as our rotary wing helicopters like ALH, LEH, and LCH. So there are the major countries we are working on. And we have submitted our proposals to all these countries — I mean for the helicopters that were of fixed-wing. And we are following-up with our lease in both our defense channels, as well as our services. So, right now, one or two leases are in advanced-stage, like, for example, Philippines and Argentina. Rest of all, we are trying to further entrust upon them to consider these proposal and then we are pushing our case with them.
Charanjit Singh — DSP Mutual Fund — Analyst
And sir, how large these initial orders could be for us?
Jayadeva, E.P. — Director Operation
Initial orders could be to the extent of around — if you start with, we are looking for some foray into ALH platform. So that could be to the tune of around INR150 million to start with.
Charanjit Singh — DSP Mutual Fund — Analyst
Got it, sir. Sir, lastly sir, on the spare side, earlier we had certain issues in terms of getting the spares from Russia. So now, how is the — in terms of the supply-chain, any issues where we need to worry about or have you resolved that, and what is the level of indigenization now we are looking at on the spare side?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
See, yeah, there has been some sort of concerns because of these geopolitical conflict, especially from the Russian side. But so far, we have been able to manage those sort of disruptions, if at all. I mean, there have been some delays, but it is getting normalized and we have started getting these supplies. And I feel that there may not be a big issue. We will be able to manage that, but as you may be, I mean, I would like to also highlight here that sofar, in the last two years, in spite of all these COVID disruptions, as well as the subsequent geopolitical conflicts, HAL has always been in a position to maintain the operation without any disruptions and the fleet serviceability has also not been affected.
We are very confident that with our channels being open up in the — with the Russians, we will be able to get the supply-chain without — continuous without any disruptions. Certain payments issues were there, which also has been sorted out. Now, we are in a position to — payments are also going through. So we will be able to — our intension is to maintain the fleet without difficulty — we will be able to maintain these fleets.
Charanjit Singh — DSP Mutual Fund — Analyst
Right sir. Sir, that’s all from my side. Thanks for taking my questions.
Operator
Thank you. The next question is from the line of Aditya from Securities Investment Management Company. Please go-ahead.
Aditya — Securities Investment Management Company — Analyst
Hi, sir. Thanks for the opportunity. My first question is on the grounding of PLSV. So what I understand is that we are going replace aluminium control products with the steel rods. So with this change, have the issues been resolved or there are still some pending design or any other issues and when can we expect the arm forces to start flying the ALH.
And secondly, if you could also help us understand, how those issue impacted the order book of the company, especially 25 ALH order, which you are expecting. And also 140 MCH order which we are expecting in the next one to two years as MCH and ALH have a similar design and engines. So will there be a delay in these orders or any of the orders because our position.
Jayadeva, E.P. — Director Operation
Okay, as you are aware, we landed in tree incidents back-to-back during the last two months — two, two-and-half months. Actually, that has put us a little bit on some backfoot, but we would like to mention. These — all these accidents are not from similar — due to similar issues. They are all different issues not attributable to the one issue only. And that’s how it is, may not attributable to the same problem. So there is no design problem attributable to design in all these three helicopters as of now. Out of this, two have already been somewhat preliminary investigations have been completed. The third one is still under investigations. We would not — I would not like to comment on that. But otherwise the design adequacy has been reinforced again and we feel that there is no requirement to redesign the whole helicopter wherever these problems are encountered. But as a precautionary measure to avoid the further — to reinforce. the earlier the control rod sort of aluminum, but now, we have decided to go into steel, so that the steel are more damage tolerant and if some sort of misalignment or some maintenance issues are there, they can be more accommodative. And that is the reason why we are going for steel rods now. It has nothing to do with the design adequacy as such. So we — the helicopters are safe in the present configuration also. So, that is why — that is how it is as of now. And other fleet owners are still flying the helicopters. So everybody is [Indecipherable] helicopter as of now. And if you see helicopter accident rate of ALH, it has flown for 3.9 lakh ours, all put together. And we have incidents of around that 7.3 or 7.4 per million hours — sorry lakh hours. So these are considered to be very good indication of safety of the helicopter comparing to other international players. And during the last — we have also — we have got a very good record of number of accidents being very-very less compared to average — normal average, which is worldwide safety. So we feel that ALH is in good hands and then design has been robust. And then this doesn’t have any impact on the future orders, which either be it UHM or for any other further requirements. Our defense services are, I mean, they are quite confident of this machine.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
No, just to add to what our Director of Operations have said, as far as this ALH, since it has been a back-to-back accidents because happened, there have been some concerns, but otherwise it is. I mean, as we have the preliminary investigations revealed, this is not really a major concern as far as the design of helicopter is concerned. We will be – whatever certain smaller issues which are coming up, which need to be reinforced, — we are — HAL is very confident that we’ll be able to get through that.
And one more thing, which we would like to mention is that the fleet is on, not that all these fleets have been grounded, I understand that one of the services is still flying. The other services — I mean air force is flying. The other – army one has ground it. And army also once we get the preliminary checks and they will also fly, but this fleet is not going to be — because it has been in operation for the last almost 20-plus year. And I just a bit of statistics on this, up to 2018, almost 18 years, we had flown almost close to two lakh hours, with an accident of almost 19 accidents, which translates into some 9.1, 9.2 per lakh hours. And after 2018, we have exploited the mission because the numbers have increased. It has equally flown another two lakh hours in the last four, five year and there, the accident rate, it is somewhere around 11 and because of these back to that accidents, which have in fact reduced it, I mean this is not to justify the accident. This is only to give you confidence that this aircraft is a very robust aircraft, proven aircraft and tested aircraft and the design capabilities and things like that, it is a continuous improvement, which we will have to make. It is not something, which only because of accidents, which is happening, which we are trying to improve on the design capabilities. But we are — it is a continuous improvement, which we will keep doing, but we can — we are very confidently we can tell that this mission is a very proven mission and there is nothing concern about that except that unfortunate incident, which has happened in the last three to four formats.
Aditya — Securities Investment Management Company — Analyst
Yeah, thanks for the detailed explanation. I just had a follow-up. So, I just wanted to know what will be the cost of rectifying the replacement of these control rods or at any other issues, which are identified, because we have to replace this for all the fleet of 300 ALH. So what is the approximate cost of rectifying this and will we be getting compensated from the [Indecipherable].
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
See, as far as this — first of all, it has to be established that as to what is all needs replacement and that sort of thing. As we understand from the preliminary investigations, it is not going to be anything very major except for this control rods again. It is not going to be an extensive proposition to convert it from aluminium to steel rod. The cost as of now, we don’t anticipate much cost. It is, I mean, it should be in the range of around INR150 crores to INR200 crores. And moreover, we are also having a warranty cover for many of these aircrafts. So the cost will not majorly impacted the profitability of company and it is going to be very — not major cause as I have told, it could be in the range of not more than INR200 crores.
Aditya — Securities Investment Management Company — Analyst
Sure, sir, I had another question regarding ROH revenue. So we had an ROH revenue of INR18,800 crores this year. So if we just broadly split, what could be the contribution of top three or four major platforms like Su 30, ALH and engines in our ROH revenue. And secondly, what kind of growth can we expect from ROH in the next two to three years. And what will contribute — which platforms will continue to such growth?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
The ROH revenue for ’22-’23, I will give some of the major platforms, which have contributed to this revenue. One is the Sukhoi-30 repair and overhaul, 20 numbers of repair and overhaul has happened which earlier it was somewhere around 18 and 15 to 18 and then to 20 now peak load. And we are further confident of increasing it to another two to three numbers extra from the current financial year.
The second one is on the engines, AL-31FP engines repair and overhaul, some 76 numbers have already been done in the current year. Our target is to reach to a number of around 95 to 100 in the current financial year to a maximum of around 105. Then rotables, of course, the various rotables also that keeps increasing. That contributed to around INR1000 crores in the last financial year. And as far as the ALH is concerned, almost 30 number of ALH has been repaired and overhauled in the last financial year. All these have been contributing to the topline growth of revenue, I mean repair and overhaul, apart from the increase in the supply of spares, which also contributed to almost close to INR5,000 crores.
So the — this sort of pattern is likely to continue in the current financial year as well with a marginal increase in the repair and overhaul activity, but from the next year onwards, the growth in the repair and overhaul be at around 5% to 6%, but overhaul within B2B also, the manufacturing also will pick up, so we’ll be able to maintain the overhaul growth.
Operator
Mr. Aditya, we request that you return to the question queue for follow-up questions. We shall take the next question. The next question is from the line of Harshit Patel from Equirus Securities. Please go-ahead.
Harshit Patel — Equirus Securities — Analyst
Thank you very much for the opportunity, sir. My first question was on HTT 40. You mentioned that we will be starting the deliveries from September 2024. So, sir what will the delivery schedule do look like? How many units we are planning for FY ’25 and then what would it the schedule from FY ’26 on.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Sorry if I have told it is September ’24, it is not September ’24, it is September ’25, because we have concluded the contract last year. It is 30 plus 24 months and if it is, I mean, it will start commencing from September ’25 and an average delivery of almost 20 aircrafts. Again, there again, it is peak delivery will be at 20. We will start with the 12, and then 16, and then 20. But there again, we are trying to expedite the delivery schedule to make at around 20 from the second year onwards so that we could get the content concluded earlier because we are expecting another 36 numbers to come from and also some potential for exports also is there.
Harshit Patel — Equirus Securities — Analyst
Understood, sir. Sir, my second question is on the engine orders. You mentioned that we will be receiving the orders for AL-31 SP and RD-33 in financial year ’24. So, sir, now here, what will be the execution schedule as to will this also follow T plus 24, T plus 36 kind of timeline or we will immediately start the production.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
We are planning to start the — I mean the production is yet to commence immediately. In fact, we already, we are also concluding our contract negotiations with the Russians suppliers so that we will not be waiting for this order to get concluded and start back working out with the vendor. We already commenced. So we are confident that we will be able to, I mean, start delivering from ’24, ’25 onwards. Both these ranges, RD33. And in fact, RD33, we are also planning in the current financial year when the moment contract is concluded, we will start delivering the numbers.
Operator
Mr. Harshit, we request that you return to the question queue for follow-up questions. The next question is from the line of Umesh Raut from PhillipCapital. Please go-ahead.
Umesh Raut — PhillipCapital — Analyst
Thank you so much for giving me an opportunity. Sir, my first question pertains to one of the major prospect that we have in the form of LCA Mk2 where as per the some of the media sources, now we are facing the challenge of signing TOT contract for supply of engine GE’s F414. So, I want to know what is exactly the status for development of LCA Mk2 and would that — would this TOT delay will hamper development timelines for LCA Mk2.
Jayadeva, E.P. — Director Operation
The LCA Mk2 design is almost — design of all the parts is almost completed. And shortly, we want to launch the [Indecipherable] production at AHL. Regarding the engine production also, we have given our, in fact, we are the production agency for GE 414 earlier also. Our ending division in Bangalore has been identified as a production agency. Recently given our willingness to be part of this also — reinforced our willingness to ADA also. ADA is speaking up with GE and the U.S. government to see that the TOT is given to the full extent. After that, we are expecting the contract to be concluded once the ADA [Indecipherable] sanction in full form.
Sanction in full form.
Umesh Raut — PhillipCapital — Analyst
But sir, do you see any major challenge in signing TOT with GE?
Jayadeva, E.P. — Director Operation
No, we are not finding any problem with the TOT with the GE. We’ll be manifesting the engine at scale.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
In fact, just to add to that, today the sort of our strategy with all our supplies including the engine manufacturers is quite clear. if at all they have to do business in India, they will have to have the TOT and the manufacturing facility established within the country. So we are working with all our OEMs towards that and we are confident that that will happen. And because they also have understood that once if they have to do business with India and with HAL, they will have to have the facilities established in the country. So we will be able to negotiate to our requirement of having a full TOT getting done within India.
Umesh Raut — PhillipCapital — Analyst
Okay, thank you so much sir. My second question is related to the bookkeeping. So we have booked about INR770 crores of HTT 40 development revenue in this quarter, but I believe there is no cost, which is booked about or before EBITDA while we have booked about INR600 crores of amortization only. So is that assumption correct?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah, your assumption is correct because it is all related to design and development and especially the intangible assets, which we had it in our books, our unamortized portion and that’s, the moment we got be sanction, we have also recognized it as part of our revenue and also release it as part of our amortization, removing it from the intangible assets from the balance sheet. So you are correct. Is it clear?
Operator
Mr. Umesh, we request that you return to the question queue for follow-up questions. We shall take the next question. The next question is from the line of Hardik Jain from ISJ Private Securities. Please go-ahead.
Hardik Jain — ISJ Private Securities — Analyst
Yeah, thank you for the opportunity. All my questions were answered. So, thank you.
Operator
Thank you. We shall move to the next questioner. The next question is from the line of Jonas Bhutta from Birla Mutual Funds. Please go-ahead.
Jonas Bhutta — Birla Mutual Funds — Analyst
Good evening sir and congratulations on good set of numbers. So, just a bookkeeping question firstly. Can you give us the quantity of aircraft and helicopters produced in FY — in the current year FY23.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah, FY23, we have produced — we have produced seven numbers of ALH, two numbers of LCA. And the AL-31FP some six numbers. Light Combat are eight numbers. Dornier, two numbers. And LCH of peak numbers. These are the platforms which we have manufactured in the last financial year.
Jonas Bhutta — Birla Mutual Funds — Analyst
And deliveries would be — out of this, deliveries would be how much, sir.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
These are all delivered. All the as per our Q4 two, three years, we call it the documentation for delivery, it has all been delivered.
Operator
And for FY24, you said you will manufacture two Mk1s in terms of Tejas, but I thought there are trainers of the earlier version Mk1. Trainers are still less. So total deliveries of Tejas this year would be how much?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
We are expecting a minimum of six plus two, eight numbers to be delivered in the current financial year as far of LCA trainers are concerned.
Jonas Bhutta — Birla Mutual Funds — Analyst
Got it, got it. And my final question was, sir, in terms of while it’s appreciated that we’ve launched the third-line in Nasik also for LCA. sir, if you can tell us the man-hour rates that were — man-hour requirements from the first plane to the 83rd plane, what kind of reductions we’ve assumed, roughly.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
No, it is — Nashik division will be — sort of productivity levels will be definitely as good as the Bangalore based divisions division, the LCA division and the Aircraft Division. So we have factored all of those thing in our contract when we had finalized it to take the average hours. So — and the average hours, which has been now considered for the contract purposes will continue to be in the Nashik division as well since the productivity level remains more or less the same and the labor cost, we will try to — it will be maintained.
Jayadeva, E.P. — Director Operation
And we achieved most of the learning from. IOC and FOC, all 40– 32 aircraft fighters you have produced. So most of the learnings you achieved. And in Mk1a, its only new systems — four new systems are there. So that is not a — not much of a scope for learning now. Of course, we’ll have to do. At Nashik, a little bit learning will be there. But in Bangalore, all the people are convergent with all the production activities.
Operator
Mr. Jonas, we request that you return to the question queue for follow-up questions. The next question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead.
Mahesh Bendre — LIC Mutual Fund — Analyst
Hi, sir, thank you so much for opportunity. Sir, given the current order book and so many orders are in pipeline and the delivery you’re talking about, what kind of growth one could expect from our company over the next two, three years? If I look at last year, we grew only by 9%. And if I look last from FY ’19 onwards, we’ve hardly grown by 4%, 5% CAGR. So if I could look for next three years, what kind of growth one should expect from the company?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
See, but, yeah — from ’19, I mean, the last four years, last five years, the average CAGR has been at around 7.7%. So the growth is — it has not been at 4%. I do not know how it has been computed at 4%. We have been growing at a rate of almost 7% in the last four to five years. That apart, we have been — it is not something which we have not indicated even in the last — I mean last year, we have been maintaining that this FY ’23 and FY ’24, the growth will be at single-digit growth of 8% — 7% to 8%. In fact, last year at 9%, we have improved our guidance and had grown at an extra percentage point to 9%. And the current financial year also, we have been maintaining that we will be growing — it will be a single-digit growth only, and it will be at around the 9% is what we have achieved, but we are inching towards the double-digit growth, which we have promised to be there from FY ’25 onwards. And we expect the — from FY ’25, it will be a double-digit growth. And after that, we expect the growth to stabilize to grow at around 12% to 13% and then stabilize at around 14% to 15%.
Operator
Thank you. Mr. Mahesh, we request that you return to the question queue for follow-up questions. [Operator Instructions] The next question is from the line of Viraj from Jupiter Financial. Please go ahead.
Viraj — Jupiter Financial — Analyst
Good afternoon sir and congratulations on good numbers. I have one question. Since FY ’24, you’re guiding around 13%, 14% growth, is it fair to assume even the margin — net margin would be a range of double digits?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
FY ’25, we have been maintaining it will be a double-digit growth, but we have not indicated — it will be somewhere around 10% — 10% to 11%/. Beyond FY ’25, we will be improving the double-digit margins to 12%. And then subsequently, we expect it to get stabilized at 15%. As far as the profitability is concerned, the growth — because we are, again, as you are aware, it is a profit policy, which has been — we have been governed by a profit policy and all the improved profit — profitable margins, which we are getting is because of the improved efficiencies which we are trying to operate at with more of — I mean, improving the productivity and also through outsourcing and other involving more private industry. So this would mean that the profitability levels at this present — our operating profit in today’s scenario is somewhere around 17% to 18%. And we are — this is — I mean percentage, which is a quite healthy percentage for an industry like us, and we are more or less be around that. Maybe — we may be marginally improving year-on-year. But definitely, it will not be — I mean, any substantial increase will be there as far as the operating profit growth is concerned. It will be hovering somewhere around 18%, 19%.
Operator
The next question is from the line of Vivek N. from Shanti. Please go ahead.
Vivek N. — Shanti — Analyst
Yes. Thank you. My question is again around the growth of HAL. We have been stable and growing gradually. But given that the amount of orders that are there from the government, there are so many different areas and almost a monopolistic kind of supply that we are doing. Do you see in the next two, three years, there will be a drastic increase in the top line at least for retail, and it will then settle at — because we are just 3 billion to be top line and if you see the top five manufacturers in the U.S. because these are the largest firms. They contribute to 350 billion annually. And HAL being the top provider of these solutions in the country, do you think there will be a drastic improvement in the top line and therefore, such in the revenue.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
So considering all the factors which are favorable to HAL and the order book pipeline, which is envisaged is what we have projected the double-digit growth from ’25 onwards and then subsequently to improve the double-digit growth, which will settle somewhere around 15%. But this has all been — this growth has been with all the factors which we have been just mentioning like a very robust order book position with very clear visibility and also being — HAL being a major player in the industry and with so much of design and development projects on the annual. So all this would mean that we will definitely have a good order book position, but the execution time line is also there. And with the execution time line, which we envisage, the growth of around 14% to 15% should be good enough for HAL at this point of time.
Operator
The next question is from the line of Shirom Kapur from Prabhudas Lilladher. Please go ahead.
Shirom Kapur — Prabhudas Lilladher — Analyst
Hi, thanks for the opportunity. I just wanted to understand the INR48,000 crore order pipeline that you mentioned for FY ’24, you said the AL31 engines will be about INR26,000 crores, the 240 numbers. For the remaining orders in the pipeline, like 80 RD33 engines and you have 25 ALH, 12 ULH, 12 Su 30s and 9 cost helicopters. Could you give the breakup of what the potential of the values would be to each of them?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah, INR48,000 crores basically major I mean, project which is included, major contracts, as we have indicated, it is 240 number for AL-31FP, which is around INR26,000 crores. The RD33is again, some18 numbers, which is expected to be around INR4,500 crores and 25 Advanced Light Helicopter DHRUV should be around INR3,500 crores. And similarly, the Light Utility Helicopters of 12 numbers should be in the range of almost INR2,500 crores. And of course, the additional Su 30 is what we are envisaging additional another 12 numbers. If it also materializes, that will give us an additional order of almost INR12,000 crores. So all this would make up for INR48,000 crores, which we expect it to realize in the current financial year.
Operator
Thank you. The next question is from the line of Abhineet from Emkay Global. Yes. I mean the prospect that you talked about for the next two, three years, I think one was in terms of LCH, which was INR45,000 crores. The others were LUH, marine helicopter and others, if you can just quantify what could be those in terms of revenue?.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
See, we have got almost AoN approved, that is an Acceptance of Necessity approved. Yes, I mean, other than what the projects which we have — which I have just now indicated where the anticipated contract and which we’ll get to conclude in the current financial year, I’m leaving out of those things. Other than that, the AoN approved projects for which the negotiations is yet to commence or rather the RFC is yet to be given, it’s on this ALH coastguard of 9 numbers for which AoN has been approved. Now the RFC will get floated, and we will be presenting — submitting our core.
Similarly, the UHM that is a supply contract of 60 numbers, which will happen after the — once the sanction for development comes through and once we start I mean, developing the aircraft, and the supply contract should come. That is another INR20,000 crores. So similarly, the PBL contract for UHM, which we will be supplying is another INR13,000 crores. So the visibility where the AoN that is the Acceptance of Necessity has been approved, where there is certainty of orders to orders to HAL is around INR36,000 crores.
So this process will start any time in this current financial year and will get concluded in the next two to three years’ time line. And similarly, further where AoN has not been approved, that is where visibility is there, where we are confident of getting the order, but where the AoN is still to be approved is towards Light Combat Helicopter Prachand [Indecipherable] where 145 numbers we are indicating. Similarly, the Light Utility Helicopter, another 175 numbers is what we estimate. Then the trainer HTT 40, for which we have received 70, 36 additional we are likely to get.
Of course, Dornier Navy and the Dornier upgrades, navy and the upgrade of IAF — that is, again, an upgrade program for which alone almost 60 numbers is expected. So this broadly would mean that the AoNs, which has not been approved also for which visibility is there is another INR65,000 crores. So INR36,000 crores for already AoN approved and INR65,000 crores is what, in our opinion, we will get the AoNs approved, which will happen in the next two to five years timeframe.
Operator
Thank you. The next question is from the line of Bhavin Vithlani from SBI Mutual Funds. Please go ahead.
Bhavin Vithlani — SBI Mutual Funds — Analyst
Yeah, good evening and sir, Congratulations for good numbers.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Thank you.
Bhavin Vithlani — SBI Mutual Funds — Analyst
Just one question, in the ROH, if you could give the revenue breakup of Su 30 and the engines, that will be very helpful?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
You are talking about the last financial year, that is FY ’23.
Bhavin Vithlani — SBI Mutual Funds — Analyst
Yes. FY ’23 as well as FY ’22, it will be very helpful.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah, FY ’22 in ROH — FY ’23, in ROH, as I’ve already indicated, some 20 numbers of Sukhoi, and 76 numbers of engine, AL-31FP engine, that is Sukhoi engine. Apart from the rotables and repair and overhaul and ALH — some around 30 numbers of ALH. So this broad is the platform for the repair and overhaul for FY ’23. This number was for FY ’22, this is somewhere around — I mean, overhaul of engines, it was somewhere around 80 numbers, and Sukhoi overhaul was around 20 numbers.
Operator
Thank you. The next question is from the line of Amit Bhinde from Morgan Stanley. Please go ahead.
Amit Bhinde — Morgan Stanley — Analyst
Hello, sir. My question is one on the margin outlook as your manufacturing deliveries start from FY’25 onwards. That’s one. Second, the provisioning we had been aiming to keep it around 7%, but in quarter four as well, it has been high. So how should we look at it going forward? And third, is there any other tax refund amount that’s pending in dispute since 2016 till date?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
As far as the tax amount is concerned, more or less everything has been concluded. I mean all the disputes have been settled. So there is nothing left out now. We have received the last of the refund and also — I mean sanction or refund sanction also in the last quarter of the current financial — last financial year, that is January, March ’23. So we don’t have anything pending left with the department. So there will not be any further settlement of dispute as far as the IT department is concerned, income tax is concerned. — then on the.
Bhavin Vithlani — SBI Mutual Funds — Analyst
Provisions.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Provisions, yes, 7% is what we are trying to maintain, but we are also trying to be as conservative as possible. The provisions which we have created in the current financial year is all to — I mean, certain of the loan items which we have a got from the Indian airports, we have created a provision because once we start supplying this, this has to be replaced with our — I mean, we’ll have to give it back to them. So we have created a provision for that. And again, replacement and other charges also we have created some provision. So all of this actual incurrence of actual expenditure, this could be the maximum provision which we have created to see that there are — there is no — it is on a conservative basis, and there will not be any further impact on the profitability. But as we could see, this expenditure as and when it is incurred, we expect that there could be some savings on these provisions as well and which could come back as an income. So we expect that the provisions to be — I mean substantially reduced in the current financial year, considering the net impact of the withdrawal of provisions, which is expected to happen in the current financial year.
Operator
The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel — Equirus Securities — Analyst
Hi, sir, thank you very much for the opportunity again. Just wanted to get an idea as to what MIG-21s will contribute towards our overall ROH revenues? Because I think now that we are going to phase them out in next few years, I think that part of the revenues would go away from the ROH sale — would that understanding be right?
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
No. I mean we are not — there is no MIG-21 overhaul at all as far as HAL is concerned. It is not coming part of our revenue stream. So we will not have any impact on the MIG-21, except for the engine R25 engines where we have been doing and that too — in the last financial year, it was over. It did not make an impact in the FY ’22, ’23 itself because we have already — that was not contributing a major revenue stream. So this MIG-21 is not having any major impact as far as it is — I mean, as far as HAL is concerned, it is hardly INR100 crores, which we are doing and doesn’t make a real impact on us, the engines part of it alone. And the aircraft is –no aircraft repair and overhaul at all.
Harshit Patel — Equirus Securities — Analyst
And this likely to be switched off ’25.
Operator
Due to time constraints, this was the last question. I would now like to hand the conference over to Harshit Kapadia for closing comments. Please go ahead, sir.
Harshit Kapadia — Vice President
Thank you, Klevin. We would like to thank Shri C. B. Ananthakrishnan sir, Director, Finance, CFO with an additional charge of CMD. Shri Jayadeva, E.P. Director, Operations. with additional charge of Director HR, for giving us an opportunity to host this call. We would also thank all investors and analysts for joining for this call. Any closing remarks you want to share with investors and analysts, sir.
C. B. Ananthakrishnan — Director of Finance and Chief Executive Officer
Yeah. Thank you,. We are really thankful for this opportunity and it has really given us also to clarify many of the doubts which were there in the minds of the various investors. And we are confident that with the sort of growth which we have been showing and with the sort of performance which HAL has been consistently been giving to the — I mean, giving in the last four to five years and with more visibility of orders being out there in the pipeline, we are sure that the expectations of all the investors will be met. And I’m sure — I’m very confident and I can assure that we will be in a position to deliver the goods to the investors, and the investors will always feel happy at the end of the day for having been associated with HAL. Thank you.
Operator
[Operator Closing Remarks]