Stocks to Watch as Railways Sanctions ₹1,236 Cr Projects to Upgrade Kavach Systems

Synopsis: Railways’ Rs 1,236 crore upgrades are driving strong order inflows, signalling robust near-term demand and future growth potential from increased allocation to the Kavach safety project.

Kavach is an automatic train protection system designed to prevent collisions, signal passing at danger, and overspeeding on Indian Railways. By integrating advanced sensors, communication networks, and control systems, it significantly improves operational safety, reduces accidents, and strengthens overall rail network reliability.

The rollout of Kavach creates strong business opportunities for companies supplying Loco equipment and signalling systems. With government allocation increasing, order inflows are expected to grow, supporting revenue visibility, enhancing margins, and making these stocks attractive for long-term investors looking at the railway safety technology segment.

What’s the new

Central Railway to Get Dual-Path Fibre Network Upgrade: The Indian Railways has approved projects worth Rs 1,236 crore to upgrade communication infrastructure and the Kavach safety system. Central Railway will receive an upgraded fibre network costing Rs 623.63 crore, covering all five divisions: Solapur, Nagpur, Pune, Bhusawal, and Mumbai.

The upgrade includes OPGW (96 fibre) installation along 2,250.68 Rkm of existing 25 KV traction lines at Rs 238.94 crore and underground optical fibre (2×48) across 2,673.21 Rkm at Rs 384.69 crore. Combined, these works create a dual-path network ensuring operational continuity even if one path fails.

Southern Railway to Extend Kavach System: Southern Railway will deploy Kavach version 4.0, an automatic train protection system, across 548 km of high-traffic routes. The Jolarpettai–Erode and Chennai Beach–Tambaram– Chengalpattu sections will use new optical fibre cabling over 240 km for Rs 158.74 crore, while Shoranur to Mangalore will cover 308 km at Rs 151.44 crore.

Western Railway Fibre Backbone Completion: Western Railway will lay 2×48 fibre optical cables across remaining stretches in Gujarat’s Rajkot (1,064 km) and Bhavnagar (589 km) divisions to enable Kavach and LTE-based train control. This upgrade, costing Rs 302.26 crore, forms part of a larger Western Railway sub-project worth Rs 2,800 crore. Here are the Stocks that earlier received an order for Kavach and potentially could benefit from

Kernex Microsystems (India) Ltd

With a market capitalization of Rs 1,600 crore, the company received orders worth Rs 876.88 crore this quarter for Kavach Loco equipment, highlighting strong near-term demand and potential future growth from increased government allocation to the Kavach project.

Kernex Microsystems (India) Ltd, established in 1991, is a prominent technology company specializing in designing, developing, and manufacturing safety systems for railways, including Train Collision Avoidance Systems (TCAS) or “Kavach”. They provide turnkey electronic solutions, including anti-collision devices and automated level crossing gates

HBL Engineering Ltd

With a market capitalization of Rs 18,511 crore, the company received orders worth Rs 1,375.36  crore this quarter for Kavach equipment, highlighting strong near-term demand and potential future growth from increased government allocation to the Kavach project.

HBL Engineering Limited (formerly HBL Power Systems Ltd), founded in 1977 and based in Hyderabad, is a leading Indian engineering company specializing in industrial batteries (lead-acid, nickel-cadmium, lithium-ion), railway signalling, defence electronics, and e-mobility solutions.

Railtel Corporation of India Ltd

With a market capitalization of Rs 8,458 crore, the company’s order book from Kavach stood at Rs 1,375.36  crore this quarter for Kavach in EC Railway and WC Railways, highlighting strong near-term demand and potential future growth from increased government allocation to the Kavach project.

RailTel was incorporated in 2000 to create nationwide broadband and VPN services, telecom, and multimedia network, to modernise the train control operation and safety system of Indian Railways.RailTel’s network passes through around 6,000 stations across the country, covering all major commercial centres.

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