Shares of HBL Engineering, a prominent player in the battery and power systems sector, are making headlines this week. On May 2, the company’s stock surged by 3%, reaching a peak of ₹494.25 during early trading hours. This rise follows the recent announcement that HBL has secured another Kavach order from Western Railway, which is set to enhance the safety of railway operations across India.
Significant Order from Western Railway
On May 1, HBL Engineering disclosed to its investors that it received a Letter of Acceptance from Western Railway. This contract entails the implementation of the Kavach system at 48 railway stations, spanning 428 kilometers. The total value of this contract is ₹145.83 crore, which includes an 18% GST component. This marks HBL’s second Kavach order within the same month, showcasing the growing demand for advanced railway safety systems.
Expanding Safety Measures
In April, HBL Engineering had previously secured five additional Letters of Acceptance for the installation of the Kavach system across 413 stations, covering an impressive 3,900 kilometers. The cumulative value of these contracts amounts to ₹762.56 crore, with a completion deadline of 18 months for each project. The Indian government’s focus on enhancing railway safety is driving this trend, as the Kavach system, also known as the Train Collision Avoidance System (TCAS), is designed to prevent train collisions and improve overall operational safety.
The Kavach System’s Impact
Launched in 2020, India’s Kavach system utilizes advanced technology that automatically applies brakes when a train operator fails to respond, significantly reducing the risk of accidents. HBL Engineering’s commitment to railway safety has positioned it as a key player in this initiative.
Recent Achievements and Growth
In March, the HBL-Shivakriti Consortium secured two additional Letters of Acceptance from both Western and North Central Railway, valued at ₹500 crore. Furthermore, they obtained another order worth ₹148.44 crore from the Bhopal Division. In December, HBL Engineering had already made headlines by winning a substantial order from Chittaranjan Locomotive Works worth ₹1,522.40 crore.
A Wealth Creator
Despite experiencing fluctuations in its stock price, HBL Engineering has proven to be a wealth creator for investors. Over the past two years, the stock has skyrocketed by an impressive 441%, with a remarkable 741% increase over the last three years. It reached an all-time high of ₹739.65 in December but is currently trading 33% below that peak.
Consistent Annual Performance
The stock has consistently delivered robust annual returns:
- 160% in CY20
- 53% in CY21
- 67% in CY22
- 312% in CY23
- 43% in CY24
As HBL Engineering continues to secure substantial contracts and expand its safety offerings, it remains a compelling option for investors looking to capitalize on the future of railway safety technology. For more insights on investment opportunities, check out our latest articles on multibagger stocks and emerging market trends.
