I have read reports for past 3 years and I agree that they deliver more than what they commit. Their bread & butter revenue stream is Industrial battery which will continue to be stable but not grow as per their own submission. Growth is likely to come from electronics where as of now I see nothing else other than Kavach which I believe is 2-4 years of play and competition is rising which may erode the margins going forward. FUZE is something which could be another significant stream but yet to kick-off. Electric trucks is something which needs to be watched if at all it will be able to give them boost.
However, as I mentioned the risk I see is main promoter who, after reading history of company and promoter, I believe is driving this complete strategy of identifying and filling technical gaps is already 80years of age.
CHAIRMAN’S MESSAGE
- Company can do Rs.1300-1500 Crores from Kavach Segment for next 3 years after that this might get slow.
- Electronic Fuses will be the second largest business by FY30.
- Management is expecting Rs.4500 Cr of total sales in FY30, which is double from FY24 Sales.
Kavach business is larger enough it might take 15 long years to cover entire Indian Railway but the major execution will be going to be in next 3-4 years.
HBL is now developing many new products, which will be announced soon as and when developed. Since, company has very good R&D background, so developing new products and get success in that is normal for HBL.
Just a basic clarification—what components are typically included in a government order like Kawach, and what elements are excluded that can potentially generate further recurring revenue for the company?
Specifically, in the case of the Kawach system, will the complete solution along with intellectual property (IP) be transferred to Indian Railways, or will there be ongoing charges for Annual Maintenance Contracts (AMC), licensing, or software support on a yearly basis?
As you know, revenue from AMC, licensing, and software services usually carries significantly higher margins and can contribute meaningfully to net profit margins through incremental revenue.
While such orders will eventually slow down over a few years, new products often take considerable time to be evaluated and adopted by government agencies. In this context, exploring global opportunities for the Kawach system could be a strategic avenue for sustaining long-term growth.
Looking forward to your views, Pardon me if comment look very basic.
There is O&M Component is present for 15 years, once the installation has been done after 2 years O&M will be needed and that will generate revenue @5% of total tender value.
For Example: HBL has done 10,000 rKm in 2 years and after running of kavach for 2 years, O&M is needed. This will generate a revenue of 250 Cr annually (10,000 * 50 Lakhs * 5%).
(50 lakh is a value of kavach System for 1 rKM)
ANNUAL REPORT HIGHLIGHTS
INITIAL REMARKS:
- Management is expecting Rs.4500 Cr of total sales in FY30, which is approx 2.5x from FY25 Sales.
- Company can do Rs.1300-1500 Crores from Kavach Segment for next 3 years after that this might get slow.
- Electronic Fuses will be the second largest business by FY30.
BATTERY SEGMENT:
LEAD ACID BATTERY DIVISION
- Telecom - Declining (because all companies are shifting from old acid lead batteries to Lithium Batteries).
- Railways - Secures large orders and business is expanding.
- UPS - Market is growing and will give good opportunity in short term as lithium will take time to come. Company plans to keep growing by increasing production capacity.
- Data Centers - Secured good orders as Pure Lead Tin Batteries offers matching high rate discharge performance. Many companies are demanding PLT batteries for Data Centers.
- Defence - Because of good demand helps better capacity utilisation.
NICKEL CADMIUM BATTERY DIVISION
- HBL is secure in the second position in the global market for Nickel Cadmium Batteries. These battery majorly used in Oil and Gas Industry.
- Export rises by 40% last year, company has very good order book from this division.
- Last year there was increase in 30% of Sales in this vertical.
- Company is expecting a good order inflows in Current FY26.
LITHIUM ION BATTERY DIVISION
- Company does not aim to compete with large players in Lithium Ion Batteries.
- For E-Trucks company will manufacture batteries using chinese cells which will be cheaper despite import duties.
- Company is doing capex of 100 Cr in CY2025 to manufacture Lithium Batteries which will be majorly used in different Industries such as Vande Bharat, German trains, Under sea Vessels etc.
DEFENCE SEGMENT:
BATTERY
- Battery are ‘Revenue’ items, it keeps replacing after certain interval.
- MoD has second suppliers, HBL is the leading supplier in battery division for all types of Aircrafts, Missiles, Armoured Vehicles, Torpedo Propulsion and Submarine Propulsion etc.
- Exports are significant contributor in this division.
FUSES
- HBL has successfully developed and obtained approvals for many types of Electronic Fuzes including grenades, artillery shells, rockets, missiles, air-dropped bombs.
- HBL is the only company in India with 100% Indigenisation.
- This segment will be the largest contributor to Revenue in future.
VOICE AND DATA COMMUNICATION
- Voice and Data communication system for Armoured Vehicles, HBL is the only supplier in India for this capital item.
INDUSTRIAL ELECTRONICS SEGMENT:
KAVACH
- Tenders covering 19,000 km were floated and contracts for 16,000 km finalized. Delivery to be compliant with the v4.0 spec.
- Company has 4000 Cr order book.
- 1300-1500 Cr revenue for next 3 years, decline thereafter.
TRAIN MANAGEMENT SYSTEMS
- Started with 6 systems, first 2 was installed by Bombardier and Alstom, other 4 was installed by HBL.
- At present it only covers 2% of total Indian Railway Network.
- TMS and its enhancements will be steadily extended to more and section of the Railways. But the value of contracts will not be comparable to Kavach.
ELECTRIC DRIVE TRAINS DIVISION
- Road test had done which shows Drive Train works reliably and could save money on operating cost for some use cases.
- It is easy to sell these products to Truck Manufacturers at low margins but HBL want to sell these to direct users by assembling Truck in House, sells low volume but get higher margins.
- Company already has land. Assembly for little volume needs lower capex.
- Sales could begins from October 2026.
Thanks for the update — it’s very helpful.
These O&M contracts also ensure that you remain in an active working relationship with the Railways. This continuous engagement positions you well for any upcoming or future opportunities. Being already present and trusted in the system increases the likelihood of being preferred for new sections or expansions as they arise.
In the AGM, have they mentioned anything about the sustainability of margins, especially the electronics?
Considering the superior margins this quarter it has helped the company to improve the overall margins, so any color on margin trajectory would help.
unfortunately not specifically. but in general commentary said we are not revenue focused but profit focused. and we look for high margin niche business’s
@satishwe, is it possible to merge the two threads on HBL? Thanks…
Revenue: ₹1,203 Cr → YoY: +131% | QoQ: +105% 
PAT: ₹382 Cr → YoY: +374% | QoQ: +173% 
EPS: ₹13.78 (FV ₹1) → FY25 full-year EPS = ₹9.6 
Segment breakout: Electronics (Rail Signalling): ₹794 Cr (+713% YoY / +340% QoQ) Batteries steady Defence soft Debt-free Cash ₹169 Cr Margin ~31% 
Exceptional results show potential, but management remains prudent — long-term story stays intact.
any update on order Book ? any significant wins ?
Looks like they will overshoot their budget requirement this year itself .They did say they will not be able to fulfil all the orders this year in the AGM. Even if they do not repeat this quarters result ,they are still likely to do very well going forward …
However, managements honesty and conservatism may come in the way of the stock becoming a rocket ..
HBL RESULT ANALYSIS Q2 FY26
Company did exceptionally very well…and also have very good run way available going ahead at least for 1.5 more years. Looking the good growth for coming more quarters.
Fuse and Defence Battery also has good asset base…This segment is yet to play out. Once this also came into picture, company will shoot up. Management is also seeing this segment to be the second biggest segment in future.
SECOND HALF WILL BE MUCH BIGGER THAN FIRST HALF
As on 31st Oct 2025, Orders worth 973 Cr were executed which means 1783 Cr worth of orders to be executed by the end of FY26.
As per the above calculations, Company has a runway of ₹1750-1800 Cr from Kavach for H2 FY26 (Majorly from locos)
Apart from this, 9400 Locos tenders are floating, and HBL has at least 1/3 of market share which means company will get at least 3100 Locos order, which make 2400 odd Crs of orders.
Hence clear visibility for FY27 as well.
Financial Model of HBL Engineering for H2 FY26 & FY27
Assumptions for H2:
- Industrial Batteries to grow at the same rate as before, with the margins of 28%.
- Defence Segment is muted as company didn’t get any orders in that, so as per annual report company will supply some batteries to defence.
- Electronics: Kavach still has the runway of ₹1780 Cr in H2 to execute but taken ₹1500 Cr (conservatively), with conservative margins of 40% (while the margins are of 58% in Q2).
Assumptions for FY27:
- Industrial Batteries Segment will grow at 6% same as before, with margins of 28%.
- Defence Segment might get some traction as management is very bullish on this segment.
- Electronics: 9400 Locos tenders were floating out of which some were filled, considering HBL has 1/3 market share at least so get 3000 locos order at least and 4000 Locos will goes to retendering out of which HBL get 1000 Locos order at least. This makes 4000 Locos order (4000 * ₹75 Lakhs = ₹3000 Cr) plus 1000 Cr of orders are pending for track and stations. This makes a runway of ₹4000 Cr for FY27, but to be conservative, I am taking 3600 Cr from that. with a margins of 40%.
Disclaimer: All are assumptions, please do your own research as well.
Hey @Tushar_Gupta1 ,
This one’s a very smart calculation. Kudos, if you have done this by yourself.
But I have one query ?
When Execution timeline from the date of order received is way beyond FY26, how did you manage to bifurcate how much order is to be executed in FY26 & how much in 27 ?
or
Is this company provided data ? (If yes, would love to know & learn from where).
Or
Its just plain calculations you have done by dividing order amount by months to which it is to be executed and than compiled the data ?
Yes i have done all the calculations,
So, basically as per the past trend and management execution capabilities, it seems they are completing orders on time. So that’s why i just calculated the execution period and divided it by number of months and compiled it. In Q2, it self management proofs themselves and it looks possible as of now that they can do the execution going forward as well.
By the above calculations we get the broader understanding about the future executions, rest all depends on the management that how they are going to execute.