Multibagger small-cap stock in focus on May 14: Shares of HBL Engineering, a leading player in the battery and power systems sector, rose 5% in early trade on Wednesday, May 14, hitting a high of ₹531.50 apiece after the company received approval for Version 4.0 of its Kavach System.
“HBL received approval from the Research Designs and Standards Organization (RDSO) for Version 4.0 of the Kavach System. HBL is the first company to receive this approval,” the company said in its exchange filing on Tuesday.
The company stated it will begin deliveries of the Kavach System (Version 4.0) against a total accumulated order book of ₹3,763.83 crore, which it expects to complete within 24 months. Earlier this month, the company also received a Letter of Acceptance from Western Railway for the provision of Kavach across 48 stations, covering 428 kilometers.
The total value of the contract is ₹145.83 crore (inclusive of 18% GST). This marks the second Kavach order for the company in just a month. In April, HBL received five Letters of Acceptance for implementing Kavach across 413 stations, covering 3,900 kilometers. Each of these contracts is to be completed within 18 months, with a total value of ₹762.56 crore (inclusive of GST), as per the company’s April 01 regulatory filing.
The company has been securing large Kavach orders as the Indian government prioritizes railway safety. 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 improve operational safety.
India’s Kavach, an Automatic Train Protection (ATP) system launched in 2020, has been enhancing rail safety through technology that automatically applies brakes when a loco pilot fails to act.
In March, the HBL-Shivakriti Consortium received two Letters of Acceptance from Western and North Central Railway worth ₹500 crore. During the same month, the consortium also secured an order worth ₹148.44 crore from the Bhopal Division.
In mid-December, the company had won a similar order from Chittaranjan Locomotive Works valued at Rs1,522.40 crore.
Stellar performer
Despite a sharp pullback from recent highs, the stock has delivered stellar long-term returns—gaining 441% over the past two years and 741% over the last three years. The stock hit an all-time high of ₹739.65 in December but is currently trading 33% below that peak.
Annually, the stock has consistently delivered strong performance: up 160% in CY20, 53% in CY21, 67% in CY22, 312% in CY23, and 43% in CY24.
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