Newsletter
HBL Engineering has been around long enough to see multiple shifts in India’s industrial landscape. For decades, it was mostly about batteries like lead acid, nickel cadmium, silver zinc, lithium; supplied to sectors from telecom to defence. But in the last few years, a new line of business has quietly taken the driver’s seat: railway safety technology.
The flagship here is Kavach, India’s Train Collision Avoidance System (TCAS). It automatically applies brakes if a signal is missed, reducing the risk of accidents. And in May this year, HBL became the first company to get RDSO approval for the upgraded Version 4.0. Since then, orders have only accelerated: ₹145 crore from Western Railway, ₹133 crore from South Central Railway, ₹54 crore from West Central Railway, adding up to an order book of ₹4,083 crore.
Those contracts are no longer just a pipeline story. In Q1 FY26, the company reported its highest-ever quarterly numbers. Revenue from operations was ₹602 crore, up 26% from the previous quarter. Net profit surged to ₹143 crore; more than triple March’s figure, helped by a sharp jump in high-margin electronics sales.
The electronics division, which houses Kavach, brought in ₹180 crore in sales this quarter; up from ₹87 crore a year ago. Industrial batteries held steady at ₹337 crore, while defence and aviation batteries saw a dip from ₹92 crore to ₹73 crore. The shift in revenue mix towards electronics helped lift margins from 17% in Q4 to 32% now.
This isn’t an isolated spike. Over the past three years, HBL has moved from a battery-heavy portfolio to a more balanced mix, with electronics and defence technology playing a growing role. That’s changed its growth trajectory and profitability profile; and investors have noticed. The stock; under its current name and its former identity as HBL Power Systems has gained 741% over the past three years
The road ahead will test execution. Delivering Kavach isn’t just about selling equipment; it means installing, testing, and integrating systems across hundreds of locomotives and thousands of kilometres of track. Most current orders have timelines of up to 24 months, and the company’s ability to meet these will influence how much of the upcoming national safety rollout it can secure.
For now, the combination of a full order book, a margin-accretive business mix, and a growing role in a government-backed safety programme has put HBL Engineering in a stronger position than it’s held in years. The next phase will be about proving that this growth is not limited to just winning contracts but also about delivering them flawlessly.
FAQs
What is driving HBL Engineering’s 217% profit jump in Q1 FY26?
HBL Engineering’s profit surge in Q1 FY26 was driven by strong growth in high-margin electronics sales, especially its Kavach railway safety systems. A better product mix and operational efficiency boosted EBITDA margins from 17% in Q4 FY25 to 32% in Q1 FY26.
What is Kavach and why is it important for HBL Engineering?
Kavach is India’s Train Collision Avoidance System (TCAS) that automatically applies brakes if a signal is missed, reducing accident risks. It’s a high-margin product and a key growth driver for HBL, contributing ₹180 crore in Q1 FY26 sales, more than double last year’s figure.
What major Kavach orders has HBL Engineering won recently?
In 2025, HBL secured multiple Kavach contracts, including ₹145 crore from Western Railway, ₹133 crore from South Central Railway, and ₹54 crore from West Central Railway. These wins pushed its total order book to ₹4,083 crore.
How did HBL Engineering perform in Q1 FY26 compared to Q4 FY25?
Revenue rose 26% to ₹602 crore, EBITDA more than doubled to ₹192 crore, and net profit surged over three times to ₹143 crore. EPS increased from ₹1.89 to ₹5.03, reflecting stronger earnings.
Which business segments are contributing the most to HBL Engineering’s growth?
The electronics division, led by Kavach, is the fastest-growing segment, with sales of ₹180 crore in Q1 FY26. Industrial batteries remain steady at ₹337 crore, while defence and aviation batteries saw a dip to ₹73 crore.
How much has HBL Engineering’s stock price gained in recent years?
Under its current name and former identity as HBL Power Systems, the stock has gained 741% over the past three years, reflecting investor confidence in its evolving business mix and growth prospects.
What challenges does HBL Engineering face in executing its orders?
The main challenge is timely execution of large railway safety projects. Delivering Kavach involves installation, testing, and integration across hundreds of locomotives and thousands of kilometres of track, often within tight 24-month deadlines.
How has HBL Engineering’s product mix shift impacted its margins?
The increased share of high-margin electronics in total revenue boosted EBITDA margins from 17% in Q4 FY25 to 32% in Q1 FY26, significantly improving overall profitability.
What is HBL Engineering’s current order book size?
As of August 2025, HBL Engineering’s order book stands at ₹4,083 crore, driven largely by contracts for the Kavach safety system.
What is the future outlook for HBL Engineering?
With a strong order book, expanding role in government-backed railway safety programmes, and a margin-accretive business mix, HBL’s future growth depends on flawless execution and continued wins in the Kavach rollout.
