HBL Engineering: Battery Stock Falls 4% Despite Reporting 238% YoY Profit Growth; Here’s Why

Synopsis: A battery stock was in the spotlight soon after the company announced its Q3FY26 result that included a 238 percent YoY profit growth while the revenue grew by 94 percent. This company’s stock has given a compounded return of 97 percent in the last 3 years.

A small-cap, technology-driven company engaged in manufacturing advanced batteries, power electronics, and railway safety solutions reported a robust Q3FY26 performance, with revenue climbing 94 percent year-on-year and net profit surging 238 percent, supported by strong momentum in its electronics and industrial business segments.

With a market cap of Rs 21,592 Cr, HBL Engineering Ltd saw its stock hit an intraday low of Rs 753 which is 4 percent lower than the previous close of Rs 785, but the company stock has given a compounded return of 97 percent in the last three years.

Q3FY26 Result

In the latest quarterly result the company has seen its revenue from operations increase by 94 percent YoY, from Rs 451 Cr in Q3FY25 to Rs 874 Cr in Q3FY26, while the QoQ decreased by 28 percent from Rs 1,223 Cr. The net profits grew by 238 percent going from Rs 65 Cr in Q3FY25 to Rs 220 Cr in Q3FY26, while the QoQ again decreased by 43 percent from Q2FY26’s Rs 387 Cr.

In 9M numbers of the fiscal year, the company saw its revenue from operations increase by 81 percent YoY, from Rs 1491 Cr in 9MFY25 to Rs 2698 Cr in 9MFY26. The net profits for the same period grew by 235 percent going from Rs 224 Cr to Rs 751 Cr.

The company has a 3 year sales CAGR of 17 percent, while the TTM is at 51 percent. The company’s 3 year profit CAGR is at 48 percent, while the TTM number is at 148 percent. The company also has a ROCE of 27 percent and a ROE of 21 percent.

Revenue Mix

Industrial Batteries and Electronics together accounted for the majority of revenue during the quarter. Industrial Batteries rose marginally by about 2 percent YoY from Rs 339 crore to Rs 347 crore, while Electronics surged nearly 1000 percent from Rs 43 crore to Rs 473 crore, emerging as the key growth driver.

Defence & Aviation Batteries declined around 28 percent YoY to Rs 39 crore from Rs 54 crore, whereas the unallocated segment grew nearly 19 percent to Rs 18.20 crore from Rs 15 Cr

But why did the stock react negatively?

Though the company saw its YoY numbers grow, the QoQ number saw a decline with a 28 percent decline in revenue and 43 percent decline in profits on a quarter over quarter basis.

Additionally, as mentioned above the revenue coming from the Electronics segment rose by almost 1000 percent, but under this segment itself HBL Engineering had faced a setback after failing to secure the Chittaranjan Locomotive Works (CLW) Kavach tender for 6,300 locomotive units due to more competitive pricing from rivals, reducing its visible demand. 

Apart from this , the company had also received a 2024 order for 2,200 Loco TCAS units with a delivery deadline of 13 December 2025, but 541 units were cancelled after missing delivery timelines, these events have impacted expected order book of the company and could be one possible reason for the negative market reaction post the Q3FY26 result.

Business Overview

HBL Engineering Ltd is an Indian technology-driven company specializing in advanced batteries, power electronics, and engineered solutions for sectors such as defense, railways, and industrial applications. 

The company offers products and services including train collision avoidance systems, telecom batteries, and energy storage solutions, while also providing integrated engineering services to support critical infrastructure and mobility.

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