Why is HBL Engineering’s share price down 14% today?

SYNOPSIS: HBL missed the CLW Kavach loco tender but maintains strong revenue visibility, expecting around Rs. 1,900 crore Kavach sales in FY27, supported by existing station orders and future tenders.

During Friday’s trading session, shares of one of the leading battery and power systems companies slumped around 14 percent on the stock exchanges. So, what triggered this steep decline? Let’s break it down in this article.

At 10:14 a.m., shares of HBL Engineering Limited were trading in the red at Rs. 788.4 on BSE, down by over 10 percent, compared to its previous closing price of Rs. 878.2, with a market cap of Rs. 21,851 crores. While the stock has delivered gains of nearly 30 percent over the last six months, it has declined by more than 14 percent so far in 2026.

As per the latest disclosures, HBL Engineering Limited informed stakeholders that it did not secure any orders decided this week for the CLW Loco Kavach tender for 6,300 units, as competing bidders quoted lower prices. 

It clarified that its earlier exchange intimation dated 18th December 2025 referred only to the Kavach Loco business and did not include the Kavach Station segment. Based on current visibility, the total expected demand for Kavach loco units this year has been revised down to 12,129 units from 18,429 units earlier, with HBL expecting to generate at least Rs. 1,000 crores of business from loco units in FY27, and carry forward business into FY28.

For the Kavach station business, HBL already has orders in hand, with around Rs. 900 crore expected to be invoiced in FY27 and an additional Rs. 400 crore likely in FY28. The company also anticipates more tenders in FY27, some of which could contribute to revenues within the same year. 

Overall, HBL estimates total Kavach-related sales of at least Rs. 1,900 crore in FY27, comprising ~Rs. 1,000 crore from loco units and Rs. 900 crore from stations. For context, the company expects total Kavach sales of about Rs. 1,880 crore in FY26.

HBL Engineering Ltd posted an exceptional performance in Q2 FY26, with net profit soaring nearly 171 percent QoQ and 345 percent YoY to Rs. 387 crores and revenues jumping 103 percent QoQ and 135 percent YoY to Rs. 1,223 crores, making it one of the strongest quarters in company history. 

Further, its sharp sell-off has led to a sharp valuation correction, with the P/E multiple sliding from nearly 80x to about 36x within 3 months.

HBL Engineering Limited, previously known as HBL Power Systems Limited, is engaged in the business of designing, developing, and manufacturing specialised batteries, electronics products and other engineering products in India. It offers a wide range of batteries and other electronics to its customers, as well as custom-built solutions.

The principal activities of the company comprise the manufacturing of different types of batteries, including Lead Acid, Nicad, Silver-Zinc, Lithium and railway & defence electronics and other products.

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