Railway stock jumps 4% after receiving ₹210 Cr Kavach system order from DFCCIL

Synopsis:
Kernex Microsystems (India) Ltd. rose after securing a contract from DFCCIL for the supply and commissioning of the KAVACH train collision avoidance system. 

Railway technology stock gained traction after the announcement of a large-scale contract win in the dedicated freight corridor segment. Shares witnessed upward momentum as investors factored in the growth visibility from the deployment of the KAVACH train collision avoidance system across nearly 931 km of railway lines.

Kernex Microsystems (India) Ltd., with a market capitalization of Rs. 1,706.11 crore, opened at Rs. 996 on Friday against a previous close of Rs. 996.05. The stock touched an intraday high of Rs. 1,038, reflecting a gain of 4.21 percent from the previous close.

What’s the News?

The Dedicated Freight Corridor Corporation of India Limited (DFCCIL), New Delhi, has issued a Letter of Acceptance to Kernex Microsystems (India) Ltd. (consortium) for the survey, design, supply, installation, testing, and commissioning of the KAVACH system, towers, and associated works.

The project covers the double line automatic signalling section across New Boraki–New Khurja–New Bhaupur–New Unchdih–New Sonnagar, spanning approximately 931 km of the Eastern Dedicated Freight Corridor.

The accepted bid cost for the project stands at Rs. 209.82 crore (inclusive of 18 percent GST), with a completion period of 730 days from the date of the LoA. With this contract, the cumulative orders received by the company, along with its consortium and partners, from April 1, 2024, till date, have reached Rs. 3,346.35 crore (inclusive of GST).

Also read: Adani Group stock in focus after winning 25-year power supply contract from Bihar State Power Generation

Financial Snapshot

On a quarter-on-quarter basis, the company reported sales of Rs. 55.93 crore in Q1FY26, down 32.7 percent from Rs. 83.07 crore in Q4FY25. Operating profit fell 26.5 percent to Rs. 12.58 crore from Rs. 17.12 crore. Profit before tax declined 37.2 percent to Rs. 9.55 crore from Rs. 15.20 crore, while net profit dropped sharply by 77.2 percent to Rs. 7.41 crore from Rs. 32.53 crore.

Year-on-year, Kernex Microsystems posted strong growth. Sales jumped 94.9 percent from Rs. 28.68 crore in Q1FY25 to Rs. 55.93 crore in Q1FY26. Operating profit rose 159.4 percent from Rs. 4.85 crore to Rs. 12.58 crore. Profit before tax increased 178.4 percent from Rs. 3.43 crore to Rs. 9.55 crore. Net profit more than doubled, rising 107.5 percent from Rs. 3.57 crore to Rs. 7.41 crore.

About the Company

Kernex Microsystems (India) Limited designs and manufactures railway safety systems and software solutions. The company specializes in professional electronic systems built for harsh operating environments.

Its product portfolio includes LxGuard, TrainSHIELD, SAFELx, Sentinex, Casry, KMDAX, ATRW, and KTPIS. It also offers embedded R&D services, electronics manufacturing services, turnkey product development, embedded software design, offshore development, and rigorous quality control testing.

Written by – Manan Gangwar

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