Railway stock jumps 3% after receiving ₹500 Cr KAVACH order from Indian Railways

The shares of a small cap company that is engaged in the design, development, and manufacturing of specialized batteries and electronic solutions are in focus after receiving two Letters of Acceptance for providing KAVACH Systems amounting to Rs 499.68 Crore. 

Price Action 

The shares of HBL Engineering Ltd, with a total market capitalization of Rs 13,105.78 Crore on Friday, reached an intraday high at Rs 479 per share, gaining around 3 percent in today’s trade. The shares closed at Rs 473 apiece, which is 1.6 percent higher than the previous close of Rs 465.45 per share. The shares have generated an impressive return of 642 percent in the past three years and a stellar 4,075 percent return in the past five years. 

What Happened 

As per a press release dated March 28, 2025, HBL Engineering Ltd received two Letters of Acceptance (LOAs) for providing KAVACH systems, which is a safety system for trains, in a section of Western Railway (Viramgam-Rajkot-Okha) and in a section of North Central Railway (Dholpur-Bina). 

The combined value of both projects is Rs 499.68 Crores, with Rs 244.68 Crores for the Western Railway project and Rs 255 Crores for the North Central Railway project.  The Western Railway project is to be completed within 730 days, and the North Central Railway project is to be completed within 700 days.  HBL Engineering Ltd has received these LOAs in association with Shivakriti International, where HBL is the lead member of a consortium. 

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Previous Order 

Previously, in March, the company, in association with Shivakriti International, received a Letter of Acceptance for the provision of KAVACH over a section of West Central Railway worth Rs 148.44 Crore. 

Financials 

The company reported a decline of 24.8 percent YoY in revenue from operations from Rs 599 Crore in Q3FY24 to Rs 451 Crore in Q3FY25. Their Net profits also declined by 20 percent YoY from Rs 79 Crore to Rs 65 crore over the same period. 

Key Ratios

The company boasts a lower D/E ratio of 0.05, and its P/E ratio stands at 39.1X. It has an ROE of 24 percent with an ROCE of 29.4 percent. The company has a strong 1-year CAGR for Revenue at 63 percent, Net Profit at 185 percent, and Operating Profit at 142.5 percent.

About HBL Engineering Ltd 

HBL Engineering Ltd is a leading Indian company specializing in the design, manufacture, and supply of engineering products and services. It operates its business under three primary verticals, namely battery, electronics, and defence. Its flagship products include train collision avoidance systems (TCAS), train management systems (TMS), Battery Energy Storage Systems, and more. 

Written By Adhvaitha Nayani

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