HBL Engineering Share Price Gains 3% After ₹146 Crore Kavach Order

HBL Engineering's share price surged 3% in early trade on May 2, hitting a high of ₹494.25, following news of another major railway contract. The stock remains in focus due to its consistent performance and strong order book in the safety systems sector.

Market Performance

• HBL Engineering's share price climbed 3% intraday on Friday, reaching ₹494.25.
• This uptick follows a series of significant Kavach orders secured by the company in 2024.
• The stock is trading about 33% below its all-time high of ₹739.65, recorded in December 2023.
• Long-term investors have seen strong returns, with the stock rising:
  • 160% in CY20
  • 53% in CY21
  • 67% in CY22
  • 312% in CY23
  • 43% in CY24 (so far)

Major Railway Contract Secured

HBL Engineering received a Letter of Acceptance from Western Railway to implement Kavach across 48 stations covering 428 kilometers.

• Order Value: ₹145.83 crore (inclusive of 18% GST)
• This marks the second Kavach order in a month for the company

Earlier in April, HBL bagged:

• Five Kavach contracts
• Total coverage: 413 stations and 3,900 kilometers
• Contract Value: ₹762.56 crore (inclusive of GST)
• Project Timeline: To be completed within 18 months

Company Background and Safety Focus

HBL Engineering, a prominent name in battery and power systems, is becoming a key player in India's railway safety drive. Its focus on deploying Kavach, India's indigenous Automatic Train Protection (ATP) system, aligns with the government's infrastructure goals.

• Kavach (Train Collision Avoidance System) is designed to:
  • Automatically apply brakes if a loco pilot fails to act
  • Prevent collisions
  • Improve overall railway operational safety

Past notable contracts include:

• ₹500 crore order from Western and North Central Railways (March)
• ₹148.44 crore order from Bhopal Division
• ₹1,522.40 crore order from Chittaranjan Locomotive Works (December)

Company Highlights

• Sector: Battery and Power Systems
• Growth Catalyst: Government's push for railway safety via Kavach
• Track Record: Successfully executing large infrastructure projects
• Investor Sentiment: Remains positive due to strong order pipeline and historical returns

Summary

The recent 3% surge in HBL Engineering's share price reflects investor confidence fueled by another high-value Kavach order worth ₹145.83 crore. With a growing portfolio of government contracts and a history of robust returns, the stock continues to be a strong player in the Indian infrastructure and safety tech space. As India accelerates its railway modernization, HBL's role in enhancing rail safety with Kavach systems keeps it firmly in the spotlight.