HBL Power Systems shares soar 6.5% to record high after securing ₹1,522 crore Kavach order

Stock Market Today: HBL Power Systems, a leading player in the battery and power systems sector, saw its shares surge by 6.5% in intraday trade on Monday, December 16 to a fresh all-time high of ₹739.65 per share following a significant order win. 

On Saturday, the company informed investors through an exchange filing that it had secured an order worth ₹1,522.40 crore from Chittaranjan Locomotive Works.

The order is for the supply, installation, and commissioning of the on-board Train Collision Avoidance System (TCAS) (KAVACH) equipment in locomotives.

KAVACH, also known as the Train Collision Avoidance System (TCAS) or Automatic Train Protection System (IRATPS), is an advanced safety solution designed to prevent train collisions and enhance operational safety.

The company is engaged in the design, development, and manufacturing of specialised batteries and electronic solutions. The company is also engaged in service activities related to its products. It operates its business under three primary verticals: battery, electronics, and defence.

It is the world’s second-largest nickel-cadmium battery manufacturer, India's third-largest telecom battery manufacturer, and the only Indian company with pure lead battery technology, as per the company's website.

The company's flagship products in the electronics business vertical include the TCAS, which enhances safety, and the Train Management System (TMS), designed to optimise track utilisation.

With the Government of India's thrust now on modernising railways with large infrastructure spending and rail safety, the company is in a strong position to benefit from this move. The government has prioritised transforming Indian Railways into a world-class entity.

For the year 2024-25, a record capital expenditure (Capex) of ₹2,62,200 crore has been allocated to the Railways.

Wealth creator

Over the past 12 months, the company shares have skyrocketed from ₹360 per share to the current trading price of ₹708 per share, translating to a remarkable gain of 97%. Long-term investors have witnessed even more impressive returns, with the stock delivering a staggering return of 990% over the last three years and an astonishing 4391% over the past five years.

Notably, the stock has consistently delivered positive returns on an annual basis, recording significant gains of 160%, 53%, 67%, and 312% in CY20, CY21, CY22, and CY23, respectively.

In the current year, the stock has sustained its upward trajectory so far, registering a 63% increase from ₹106 to its current level.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.