HBL Engineering Sees 8% Surge Following ₹762 Crore Contract Win from Central Railway

HBL Engineering's stock surged and touched a high of ₹509.9 per share, up 7.92 per cent in Today's trading. This intraday hike is the firm’s biggest intraday jump since 19 March this year. The market reaction came after HBL Engineering won five Letters of Acceptance (LoA) for the Central Railway worth ₹762.56 crore.

The contracts involve supplying the indigenous train collision avoidance system, Kavach, to 413 stations covering 3,900 kilometres of route. These projects are expected to be completed over the span of 18 months, said the company in an exchange filing. With this latest acquisition, the value of Kavach contracts won by HBL Engineering in the current fiscal year has reached ₹3,618 crore.

Although the execution of such a large order has resulted in favourable market sentiment surrounding the company, we must look at the bigger picture when analysing HBL Engineering's stock performance. Even though the shares have rebounded around 22 per cent from 2025 lows, they still trade 17 per cent lower on-year as against a modest 0.55 per cent decline in benchmark Nifty 50 index. The company's market capitalisation now stands at ₹14,136.94 crore.

Founded in 1977, HBL Engineering is a multi-segment business that specializes in the design, manufacture and supply of a wide range of power solutions. The firm has also made its mark in sectors like telecommunications, defence, energy, railways, and renewables, with aspecialty in backup power including batteries and energy storage devices for mission-critical applications. HBL Engineering also offers energy storage technologies for grid applications, responding to the growing demand for integration of renewable energy sources. Offsets include the production of advanced battery systems for submarines, as well as aircraft and tactical communication system systems in the defence sector.

Before securing the order, HBL Engineering had announced the receipt of two Letters of Award in late March for the provision of Kavach systems for ₹499.68 crore from Western Railway and North Central Railway.

In financial terms, HBL Engineering's net profit before taxes (on a consolidated basis) for Q3 was down 26 per cent year-on-year to ₹58.38 crore. For the same period, the company's revenue also posted a decline of 24.8 per cent to ₹450.5 crore year-on-year. It is against the backdrop of recent financial performance that this new order from Central Railway assumes significance, which is likely to add to the company's future revenue streams.

The stock of HBL Engineering reacted positively to the ₹762 crore Kavach contract from Central Railway. Although this win is a significant-looking contribution to the company's order book – taking in everything from power plants to the railway biz – it comes in a year that has been difficult for the stock and lately profitability has gone down. Its diversified operations across critical power solutions also means that the company has the potential to benefit from future infrastructure developments and an increased focus on railway safety, especially powered by its growing engagement in the railway signalling and renewable energy markets.

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