Railway stock jumps 7% after winning ₹1,522 Cr KAVACH order from Chittaranjan works

In Monday’s trading session, the shares of one of the leading Auto Ancillaries stock specialised in manufacturing of advanced power backup solutions, including batteries, fuel cells and other energy storage systems jumped upto 7 percent after receiving new work order from Chittaranjan Locomotive.

Price action

With a market capitalization of 19,274 Crores on Monday, the shares of HBL Engineering Ltd jumps upto 7 percent after making a high of Rs 739.65 compared to its previous closing price of Rs 695.

What happened

HBL Engineering Ltd has received a new work order worth Rs 1,522.40 Crores from Chittaranjan Locomotive works for the supply, installation and commissioning of an on-board Train Collision Avoidance System (TCAS) or KAVACH in 2,200 locomotives and the order is to be completed within 12 months.

The Train Collision Avoidance System or (KAVACH) is an advanced safety system developed by Indian Railways to prevent train collisions. It uses sensors and communication technology to automatically apply brakes if two trains are on a collision course, enhancing safety and reducing human error.

About the company

HBL Engineering Ltd is one of the leading Auto Ancillaries stock specialised in manufacturing of advanced power backup solutions, including batteries, fuel cells and other energy storage systems.

They are recognized for their innovation in high-tech products for sectors such as defence, railways, aerospace and industrial applications. The company offers a wide range of products, including lead-acid batteries, lithium-ion batteries and integrated power systems, catering to both domestic and international markets. 

HBL is committed to sustainable energy solutions and is a key player in driving the growth of India’s energy storage and backup power industry.

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Segment’s Revenue FY24

HBL Power’s segment revenue is distributed across various sectors as follows: The Batteries segment contributes Rs. 1,42,279.19 Crores, followed by the Electronics segment with Rs. 54,066.97 Crores,  Defence & Aviation sector generates Rs. 17,961.16 Crores and  the Unallocated segment accounts for Rs. 9,813.48 Crores .

Financials 

The company’s revenue declined by 4.7 percent from Rs 559.94 crore to Rs 533.19 crore in Q2FY24-25. Meanwhile, Net profit rose from Rs 68.67 crores to Rs 87.26 crore during the same period.

Key Financial ratios

HBL Engineering Ltd  has an impressive  Return on Equity (RoE) of  23.88 percent and a Return on Capital Employed (RoCE) of 29.36 percent. Furthermore, the company’s debt-to-equity ratio is 0.05.

Written by Sridhar

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