HBL Power: Signs of change

HBL power systems promoted by Dr A. J. Prasad was setup in 1986. It has built substantial expertise and research capabilities in batteries. He along with Ms. Kavita Prasad (daughter)- whole time Director and a team of experienced professionals, look after the day-to-day operations of the company. HBL has been a well-known name in the manufacture of industrial batteries catering to various industries telecom, railways, power, defence, etc. Over the years HBL has diversified over multiple industries other than batteries like electronics and engineered products based on in-house developed technologies. The company’s product portfolio mainly caters to niche sectors namely telecom, UPS, solar, defence and railways in India. Although, batteries continue to remain the major revenue contributor for HBL, with HBL being the second largest supplier for telecom batteries, the company is gradually working to reduce its dependence on telecom sector and increasing its concentration towards defence and railways.

HBL, a history of R&D over the years:

HBL has a history of developing significant R&D capabilities. The below table gives some idea about various projects/R&D initiatives that HBL has taken over last many years (from annual reports):

As one could see HBL over last many years have undertaken several long-term projects. Despite some critical and complex projects HBL has been a rank underperformer and has shown significant issues in commercialization of this R&D.

Is something changing here?

HBL has become virtually debt free from incurring an interest expense of 126 cr in FY13 also the margins in Q3FY22 were the best.
HBL’s Order book over the years as reported by care ratings:


Two things which are visible are
a) Increase in order book from 500 cr to 800 cr
b) Change in order mix from Lead Acid to more specialized segments.

The latest care report also says this on new capex:
The company is planning to set up its own manufacturing facility at Mahbubnagar, Hyderabad to manufacture Lithium Ion cells and Electric Drive Train (EDT). The total cost for proposed capex is expected to be around Rs. 110.00 crore to be completed in two phases. The capex is proposed to be funded through term debt of Rs.80 crore and balance through internal accruals. The financial closure for Phase I is partially achieved. The Phase I of the project is envisaged to achieve COD by Q4FY22 and Phase II will be started on successful completion of Phase I.

As of date no company in India makes Lithium Ion cells.

Further there is significant activity happening on the TCAS front. TCAS is now renamed as Kavach and tenders for Kavach for Delhi Howrah and Delhi Mumbai routes (3000 KM) are already out. As per my understanding TCAS which was earlier required for safety reasons has now become an operational requirement for trains running under 160 KMPH mission raftaar.
As per government plans Kavach will be installed phase wise on around 30000 KMs. Kavach has only three approved vendors as of date Kernex Systems, Medha Servo and HBL. The total opportunity size is estimated at around 15000 cr (for 30000 KM) at 50 lac per KM. Some tenders listed on railway site are as follows:

Kavach Work Status:

Some promotional material for Kavach from Railways:

In conclusion HBL is at an interesting stage in its evolution. Going by its track record the company has never failed to deceive, its products, R&D have always been impressive but the execution never up to the mark. The execution on Lead Acid side also shows company’s deficiencies in its operating structure including issues with a management focused heavily on R&D, lack of processes and a failure on pretty much every side of the organization like marketing, sales, strategy except R&D. Despite the above HBL today is at a place where it is into areas of significant future growth. Its capabilities in Railway electronics (TCAS/TMS), specialized and differentiated batteries for defence, data centres, aviation, mobility and energy storage solutions can each be a very large vertical. All these make HBL a very interesting play.


a) HBL’s core business of lead acid batteries is shrinking and in most of the other things it is doing there could be significant lumpiness and delays.
b) HBL has a very bloated balance sheet in terms of receivables and inventory. HBL’s inventory management has been extremely poor over the years. Some of it could be due to the nature of work it does too.
c) Dr. Prasad is the brain behind HBL. He is 77 years old and this creates a significant key man risk for HBL.
d) The company’s annual reports mention several projects since many years with little to show up for. TCAS/TMS/Interlocking etc. have been delayed multiple times.
e) TCAS orders are for L1 player only, so orders are not guaranteed.
f) A lot of what HBL does is B2G in nature which brings its own set of uncertainties and business longevity issues.

Discl.: Invested

Aircraft Batteries

Newsletter highlighting tank batteries:

Newsletter highlighting ESS and German rail project and data center

Command consoles made by HBL for Kalvari class


HBL Power chart shows nice rounding bottom and a cup and handle breakout. Range of cup is from 12 to 72. Breakout zone is 72. If this pattern plays out, target can be 130. disc: invested as a techno funda bet.


If the patent lies with RDSO and Medha + Kernex, then would that not impact HBL? Would they then be relegated to a systems implementer role as a contractor with lesser margins?


The patent is jointly held by RDSO + all three companies (Kernex+Medha+HBL). By law newer entrants can come but the approval process will be long and can take over three years. All three Medha+Kernex+HBL have already executed trial projects of around 1000 KM combined.

Please go through the RDSO handbook:

From the handbook::


Sharing another article from HBL’s newletter:



On PLT batteries:

2015 AR:

i) Data Centers

A technically superior battery – Pure Lead Tin (PLT) had been developed by HBL, who is the only manufacturer in India. The trend in data centers is for more energy efficient batteries which need to provide very high current for short duration; PLT is the best product for such application. HBL is in the process of establishing PLT in this segment; the size of this opportunity is bigger than the telecom segment.

ii) Engine Starting Batteries

HBL is making good progress in Diesel Engine (DG) starting battery segment with its speciality PLT batteries in both AGM and Vented version. HBL plans to be a significant player in this segment backed by its growing association with leading DG and Heavy Earth Moving Equipment manufacturers, supplies to telecom tower companies and the replacement market. Widened the export market for PLT battery in battle tank application. Received commercial order from Heavy Vehicle Factory, Avadi for MBT Arjun tanks for the Indian army. Received commercial order from Volvo Renault France for military trucks.

2016 AR:

PLT batteries: HBL has developed a specialty battery using Pure-Lead-Tin (PLT) technology with superior high power capability (work was begun in 1998). These batteries are a high current source for a short time period and used as power back up in large data centres. Since PLT batteries can deliver high power current, they are also best suited for engine cranking and hence find application in DG cranking, Heavy Earth Movers, Large trucks and in battle tanks. The Company enjoys a time tested business alliance with Cummins, the leading diesel engine manufacturer in India – the Company supplies these DG HBL has also tied up with TAFE Motors and Tractors Ltd (TMTL) for supply of these
batteries along with their DG sets for telecom tower entities and retail users. This product is under approval stage with other large DG manufacturers. The Company recently developed a new product – PLT vented batteries for price sensitive market for DG cranking application. The Company has created a dedicated business development team focused on marketing its PLT batteries for data centre
applications. The version for battle tanks has NATO registration – this enables the Company to market the product across the world for battle tank applications. batteries under white label program.

The above excerpts from two annual reports clearly show that development and approval of PLT batteries is a long drawn process and there are significant entry barriers. Since PLT batteries are used in specialized applications for defence(Engine cranking) and for Data centres a large emerging area I looked further into this segment.

So what is a PLT (Pure lead Tin) battery: A PLT battery also called TPPL (thin plate pure lead) is a VRLA (Valve regulated Lead Acid) AGM battery with very thin pure lead plates ( < 1mm). This arrangement gives significant advantage in certain types of usage when compared to standard lead acid batteries:

a) High energy density
b) Excellent high rate performance
c) Excellent low temperature performance
d) Long float life
e) High cycle life
f) Smaller size for the same capacity

In certain application like engine cranking, cold weather usage, UPS backup for less than 5 minutes before shifting to genset etc. PLT batteries have significant advantage. Also areas where there is large power requirements for a very small time PLT batteries are better placed.

Enersys is an American listed company is the market leader in PLT (TPPL) batteries. It is a virtual monopoly with Enersys having a capacity of over a Billion $ of TPPL batteries. Enersys plans to expand its capacity further by 20%. Enersys in 2018 acquired North Star another TPPL battery mfr. to have a virtual monopoly in this segment. Enersys documents also point to Data centres being a large area of usage for TPPL batteries. From Enersys recent presentation:

On Enersys acquisition of North Star:

From the above article:

The EnerSys acquisition means it is the only major company to make TPPL batteries.

Enersys Tppl Battery Past Future.pdf (4.8 MB)
Enersys Q1FY23 PPT.pdf (2.2 MB)
Enersys Data Centre 3.pdf (215.5 KB)
Enersys Data Centre 2.pdf (214.9 KB)
Enersys Data Centre.pdf (1.6 MB)

From the above it is very clear that PTL batteries could be a significant contributor for HBL in coming years following the growth of Data Centres, how HBL exploits this opportunity is yet to be seen.


TCAS or KAVACH is likely to become a reality in numbers for HBL and also it’s a global opportunity.

Some interesting info from the article:

The estimated cost of the works to be done on the tracks is Rs 20 lakh per km while the cost of the installation inside the locos will be Rs 60 lakh per loco.

Kavach would be installed across 2000 rail route networks during the current fiscal year of 2022-23 and over 4000-5000 rail route networks in every subsequent year would be brought under this safety system, officials said.


Indian Railways (HBL Timken).pptx (2.7 MB)

Indian Railways Sector PPT covering HBL Power and TIMKEN by VP Kolkata members


HBL is the TMS implementer in howrah … Electronic interlocking also they have been working on … The integration of TMS with this EIS can be done by them


Good operational performance from HBL for q1 fy 23.

Revenues up from 233 to 322 crores.

Operating profit up from 7 to 29 crores. (last year there was an exceptional income of 15 crores which had inflated profit figures)

PBT up from 22 to 29 crores. (not comparable due to exceptional item last year)

Net profit flat 20 cr vs 20 cr. (again not comparable because of exceptional item of 15 cr last year)

For those wanting to look at results in details, segmental results provides interesting reading. Both batteries and electronics division have shown improved and turnaround performances respectivelyu.

hbl q1 fy 23.pdf (1.5 MB)


Indian Railways rolls out Train Collision Avoidance System.

TCAS to be offered to global rail market.

INDIAN Railways (IR) is accelerating the deployment of the domestically developed Train Collision Avoidance System (TCAS), now known as Kavach, with the aim of installing it on 2000 route-km in the current financial year.

Kavach would then be installed on a further 4000 route-km each year, with the aim of equipping IR’s 68,446 route-km network by 2028.

The system has been developed in India by the Rail Design and Standards Organisation (RDSO) in collaboration with Medha Servo Drives, HBL Power Systems and Kernex Microsystems.

Intended to provide a more cost-effective alternative to ETCS Level 2, Kavach automatically applies the brakes and brings the train to a stand when another train is detected on the same line, or when the driver passes a signal at danger.

In the cab, there is an On Board Display of Signal Aspect (OBDSA) for the driver, while lineside RFID is used to identify trains and their direction.

Kavach is in operation on 1098 route-km on IR’s South Central Railway, and IR estimates that it will cost Rs 250bn ($US 3.2bn) to install it on its 11,000km High Density Network and the 13,000km Highly Utilised Network.

Within a budget of Rs 15bn, the Ministry of Railways called tenders earlier this year to install Kavach on 3009 route-km in IR’s Eastern, East Central, North Western, Western, Northern and North Central zones. Two of the 10 bids were opened last month, while the remaining eight are to be finalised within the next three months, according to the ministry.

India’s railways minister, Mr Ashwani Vaishnaw, recently told parliament that a three-member technical committee had been set up to upgrade Kavach, with the idea of offering the product to the global rail market.

Kavach has a deployment cost of Rs 5m per km, compared with an estimated deployment cost of Rs 20m per km for ETCS Level 2.

The system currently uses ultra-high frequency (UHF) radio for communications between onboard and lineside equipment, and research is in progress to make Kavach compatible with 4G long-term evolution (LTE) technology to enhance its export potential.




Rajdhani, Shatabdi, Duronto soon to be part of history
Rail mfg and accessories companies look like huge opportunities

Source : “The Statesman” via Dailyhunt

Dated 17 August 2022


Important update:
Ashoka buildcon secured a TCAS order recently and some more new entrants entering this TCAS/KAVACH space. Till now I think that only three players are existing in this space (Medha, HBL and Kernel) but recent news suggests that TCAS space competition is intensifying and new players are also participating in tenders. This is definitely a negative news for this stock on TCAS point of view.
Please share your views
With thanks

Disc: Planning to reduce the stake


The ireps site has a list of approved Vendors for various Item/Sub-item etc. This is the list of approved vendors:

Now if one searches for Item ID: 3100234 , one can see a list of Approved Vendors and Developmental Vendors. Railways always have plans to develop newer vendors after following the due process. The search lists the following approved vendors:

(ID- 1856)
(ID- 62058)
(ID- 1593)

and two vendors under development:
(ID- 106230)
(ID- 8542)

the above developmental vendors also has conditions specified for their approval.

So how can Ashoka Buildcon come when it is neither an approved vendor nor a vendor under development?
From my understanding of Railway bidding, anyone with or without technology can bid in a tender if they meet the required financial and some other criteria like project execution track record with Railways. Now if the bidder is L1 and does not have the approved technology it needs to tie up with an existing vendor and failure to do so will result in blacklisting. In this case Ashoka seems to have partnered with one of the three approved vendors for technology.


I was following this TCAS system for few years and the limited approved vendor list was the reason I invested big in kernex and got good returns out of hype. But I think looking at the size of tcas projects 3 or 4 companies would not be sufficient to cater to the size of railways. As soon as these projects pick up pace many others would start joining it I guess just like the NHAI projects.
Coming to this specific project found this on ECR site.

According to this all three approved vendors and Ashoka buildcon competed for the tender. It’s possible for tie up but if all these companies are competing in tender I don’t see a reason why any of them would tie up with Ashoka.
I’m still digging into how they got the tender but looks like sooner or later many players would enter the game as tcas system matures. It’s still in very nascent stage. At that point more than the initial approved vendors, those who can finish large projects efficiently and quickly will be benefited more.

Disc: not invested in any of the above mentioned in last 6 months


Dear Anant- Yes absolutely you rightly pointed out. If it’s a consortium with any of these approved vendor then its ok but in that article no where it is mentioned like that!!
What’s happening I am unable to understand.
Thanks for sharing your views

1 Like

Very likely that Ashoka must have had some understanding with one of the three pre/post bidding let us wait for the contours of the bid to come out.

I don’t see any reason why HBL/Medha should partner with anyone but incase of Kernex the balance sheet does not support large tenders and hence it makes sense to partner with other EPC players. One thing that I don’t understand is why is Siemens HBL’s partner?

One good thing that I can infer is things are moving and we can hope to see Kavach tender results coming out in some time now.


Dear Anant - Yes here the transparency system of the management is very important.
Out of three Medha is not a listed player but Kernex and HBL are the listed players. These two companies are not conducting any concall or investor presentation etc., to improve the investor confidence.
HBL bidding for TCAS along with SIEMENS as a consortium but till now they have not disclosed it to small investors (data is available in public domains).
Similarly HBL also planning a Manufacturing plant of Lithium ion batteries(This is also not shared with small investors but the same is available in credit reports). These things are not good for small investors.
In recent times one FII reduced their stake in HBL, is it is a sell signal or how read this whole scenario?
Disc: Reduced my holdings.


I have a different take here in my opinion as long as there is no information asymmetry between different set of investors irrespective of their holdings I will not fault the management. In my case I have written multiple emails to the CS but the company said they will not disclose or discuss anything individually and as a policy they do not meet investors. I do want them to conduct conf calls and interact with investors but I also understand that it is their prerogative and leave it to their discretion.

FII selling or buying has no merit in my analysis, they have their own reasons and I have my own and anyone of us can be right or wrong. One of the biggest money that I made was in Laurus and I loaded it up when Warburg Pincus was selling the stock lock stock and barrel.


Dear Anant - Point taken, but did you mean that if a company is planning to put a manufacturing plant and they disclosed it to the rating agencies only and not to small investors! Is it the right way? If so, What about the small investors, how do they will get that news???
Similarly if they have taken a U - Turn in the same case or they postponed the proposed called etc., then who will get that information?

Exchange filing is not necessary in both the cases?

I accept that, Company did remarkably well in last five years. They are improving their margins, reducing debt and entering in to high margin businesses but these are small points which looks some negativeness in their policy to me.

With thanks

Disc: I am still holding the stock but I reduced my stake.

1 Like