HBL + Medha mostly.
And after seeing Q2 numbers it’s safe to assume that the majority out of 1200 were supplied by HBL.
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Railways has released another significant KAVACH tender, this time from BLW:
I wasn’t expecting one more tender this year, but this indicates that the Kavach TAM may be higher than what was earlier visible.
BLW’s latest tender covers 2679 loco equipment sets. Considering the rate of Rs.80 lakh per unit, the tender value comes to roughly 2100 crore.
Here’s the tally of major Loco Kavach tenders floated in the current year:
CLW: 5600 crore
ICF: 1900 crore
BLW: 2100 crore
That brings the total to nearly 9,600 crore of fresh loco Kavach orders expected to be awarded soon, indicating meaningful incremental demand for all OEMs.
Important point to note here is, the delivery condition is VERY STRICT, same as it was in the 2024 CLW tender:
OEMs to supply within 12 months, and, “NO EXTENSION OF DELIVERY PERIOD” allowed.
With the ongoing execution of last year orders + more orders this year.. The theme looks even more interesting than ever! :)
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CG Power - Kavach 4.0 order is cancelled due to the delay in approval times, is this going to have a positive impact on order additions for HBL. Apart from that there are huge orders also of Kernex which have expiries in November
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But what about current CLW order to Kernex if strict timelines are there ? Current CLW order to kernex will be cancelled as well and retendered ? What do you think ?
Kernex received v4.0 approval in mid-October. They will get 1.5 months to make installations. So whatever then can do upto 1st Dec (10 days before the contract end date of 11th Dec 2025) will be accepted. Remaining quantities will have to be retendered.
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Kavach December 5 2025 Update
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2199327®=6&lang=1
Oct 2025 Update
July 2025 update
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2150296®=3&lang=1
Nov 2024 Update
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2086655®=3&lang=2
What the data suggest is 4154 loco installations (by all players) by 5 December 2025 , 2,892 Locos by Oct 31,2025, 1107 by July 31,2025 and 707 by Nov 2024
4154-2892= 1262 installed by all players in November (30-35 days)
2892-1107= 1785 installed in October, September and August (Assuming even distribution so 600 per month)
1107-707=400 installed from December 2024 to July 2025 (8 months)
Another interesting thing is 12100 Locos have already come for tender (excluding Retender)
7000 CLW Tender 1 (Closed), 2400 ICF Tender 2 (Closed) and 2700 BLW Tender 3 (Will close by December end)
Given Around 4154 installed till 5 December and and given this is last month for all players another 5000-6000 locos will come for re-tendering
Total Locos orders will be around 17000-18000 Locos (12,100 new and 5000-6000 Re-tender)
And assuming 20-25% market share of Top 3 players (HBL, Medha, Kernex) , they should get atleast 3500-4000 additional Locos orders which means FY27 and FY28 Loco revenues could be similar to FY26
HBL did 975cr in H1 (793cr in Q2 and 180cr in Q1) Assuming all revenues were loco they would have installed around 1200 Locos in H1 (Around 1000 in Q2 and 200 in Q1) and around 1000 were left for installation in Q3 so we should similar execution in Q3
On track and station kavach side
HBL Orderbook at start of year for Kavach 4.0 was 4000cr rough split was 1800cr in loco and 2200cr in Track. Given the initial tethering issues and strict deadline of December 2025 ( HBL and Medha had 4-6 months to execute while Kernex just had 1.5 months)
Companies till now have not focused on track orders execution but the timeline to execute track is also 2 years from date of receiving order and given 2-3 Quarters have already passed and hardly any track installation as of today 738 RKM (or 369cr) has been installed with Kavach 4.0. We should start seeing Track Kavach execution increase from Q3/Q4.
HBL itself needs to do 2200cr in remaining 6-7 Quarters or roughly 300-400cr per Quarter of track Kavach
So FY27 and FY28 Kavach Revenues should be better compared to FY26 (Given similar loco numbers in all 3 years but track Kavach will add another 1000cr per year)
Additionally every year minimum 10,000-15,000RKM will come for tender for Track Kavach as Indian Railways is gearing up to commission Kavach 4.0 on various routes throughout the country within a short span of 6 years
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Hello,
Does anyone have idea of what is the installed capacity for manufacturing KAVACH units for HBL, Medha & Kernex Microsystems?
Wanted to understand what is the order intake capability of the company given they have approvals in place and new tender results are expected to comeout.
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As per the IREPS website, the following is the listed capacity of the three players mentioned
| Sets per annum | Stationary Kavach | Onboard Kavach | Remote Interface Unit |
|---|---|---|---|
| Medha | 2200 | 11000 | 3200 |
| HBL | 3000 | 5000 | 2500 |
| Kernex | 600 | 4000 | 400 |
Medha has two approved plants with equal capacity of each type in both plants. So, aggregate capacity has been considered assuming these are separate capacities.
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Management Update - 1659 kavach supplied out of 2200 order for HBL. Rest will get retendered. As per their estimate, only 3000 units got commissioned out of 10,000 orders with all vendors.
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Huge chunk is going into Retendering. No one expect that i.e. 7000 Locos
If that will distributed on the basis of execution capabilities HBL is going to get biggest share out of it. To be conservative lets consider HBL will get 1/3 of 7000 Locos which is still 2400 Locos which is significant. Additionally management stated 11429 Locos order are going to come this year, out of which 20% is for developmental which left out 9140 Locos for approved. Out of 9140 Locos 25% will go to Kernex because of MSME guideline. After all 6800 Locos left for Medha and HBL. Lets take 3000 for HBL and 3800 for Medha.
This show 5400 Locos opportunity is still left for HBL. Considering this number, I am expecting 1400-1500 PAT for FY27 without including Retender locos. This financial year it can do 1000 odd Cr PAT for whole Year. Considering retendering of locos it gives good visibility of FY28 aswell.
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While most of the buzz is around on-board (loco) Kavach orders, it’s important to remember that HBL has ~₹2,000 cr of track-side Kavach orders in hand, where execution so far has been relatively limited.
The same broadly holds true for other Kavach OEMs as well.
Worth keeping this in mind while forming your bias and doing your calculations.
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HBL Engineering – decoding Kavach execution capacity
From 13th May to 13th Dec, HBL got an effective execution window of ~7 months.
In this period, HBL manufactured, supplied, installed and commissioned 1,659 units, implying an apparent run-rate of ~237 units/month.
At first glance, this looks modest. But that interpretation may be misleading.
This 237 units/month is NOT manufacturing capacity.
It represents the end-to-end system throughput, which includes:
- manufacturing
- logistics
- loco shed availability
- installation
- testing and commissioning
The binding constraint here is installation + commissioning at loco sheds, not factory output. Shed access is scarce, shared across OEMs, and dependent on traffic withdrawal windows.
This is also supported by the fact that: execution shortfall was system-wide, not vendor-specific - even Medha failed to supply!
For context, Kernex has publicly stated a production capacity of ~450 Kavach units/month.
HBL has not disclosed its capacity.
Given HBL’s scale, manpower and manufacturing depth, it is reasonable to assume that its production capability is at least comparable, if not higher.. But the actual realised throughput today is capped by downstream execution constraints.
Takeaway:
What we are seeing is installation-limited execution, not production-limited capacity. As factory fitment and execution infrastructure improve, realised run-rates for future orders can look very different from what this 7-month window suggests.
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Tonbo Imaging has filed for DRHP for its IPO. HBL invested in Tonbo in 2023. I think they hold around 15% shareholding in Tonbo. The IPO is an entirely offer for sale (OFS). HBL is not listed as one of the “selling” shareholders. So looks like they plan to retain their stake.
In another update, the govt plans a large CAPEX for railways, including for scaling up of KAVACH - Modi govt plans biggest-ever rail safety spend of Rs 1.3 trillion: Report
The allocation-about 12% higher than the current year’s budget-is expected to be channelled into upkeep of rolling stock and core infrastructure such as track renewals, along with scaling up Kavach, India’s indigenous automatic train protection system, one of the people said on condition of anonymity.
A lot of positives working in favour of HBL -
- KAVACH orders and execution ramping up
- Massive new loco KAVACH tenders expected soon
- Electronic fuze business has seen green offshoots this year. Hopefully will become a large business in FY27
- Demand for its traditional and new types of batteries remains robust.
- Monetization of Tonbo stake will give it additional cash.
- Any progress on electric trucks/vehicles will be an added cherry on the top.
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I thought you mentioned that HBL is NOT listed as one of the “selling” shareholders. So trying to understand the above comment.
sorry for the confusion. They are not selling right now. What I meant was, they will eventually sell when they get a good valuation.
Someone had asked the Chairman a question about Tonbo stake during the AGM held in 2024. The chairman had said that they have no future plans of any tech co-development with Tonbo and it is merely a financial investment. They will sell their stake whenever Tonbo gets listed.
So eventually they will monetize.
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This tender had a closing date of 31st Oct 2025. More than 2 months have passed since then.
Another tender from BLW had a closing date of 20th Nov 2025.
Any idea why the supply orders have not been awarded yet? Is there a precedence of such delays in closing tenders?
If you see the last tender float date regarding 2200 locos, it was done on August 5, 2024 by CLW. ( Tender Reference No. 70245011).
As described in the previous tender, Bid Submission Deadline: September 4, 2024 at 11:00 AM
The bidding window was open from August 5 to September 4, 2024 (11:00 AM). Companies were given exactly 30 days to prepare and submit their technical and financial bids
ORDER AWARDMENT DATE
December 14, 2024
HBL Engineering Limited was awarded the order on December 14, 2024, as per the official SEBI Regulation 30 filing submitted that day.
So it took 101 days (3 month 10 days) from Bid closing to order award & 131 days (4 month - 13 days) from Tender float date.
So general time line I guess is around 3 months + from Bid closing date (NOT the TENDER FLOAT DATE - we need not to confuse between the 2).
And as company posted in it last announcement, they are hoping to get the revised order by/before 31st march 2026.
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Kernex has recently made an announcement which confirms the cancellation of unexecuted tenders of loco kavach. There was some uncertainty regarding a possible extension, but that doesn’t seem to be the case anymore.
This would lead to re-tendering of unexecuted tenders as communicated by HBL, in addition to the announcement of BLW and CLW tenders, which are expected shortly as per Kernex.
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Quadrant just received a 287 crore order from CLW (surprising, as they don’t have 4.0 approval yet)
More orders should be on the way for other OEMs including HBL.
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Vendors don’t need 4.0 approval to get the order. They just need to be qualified as a “developmental vendor” which happens when you enter the field trial stage for v4.0. Companies enter this stage after clearing the previous stage which is prototype stage.
- As per my understanding there are 3 companies in the approved stage - Medha, HBL and Kernex. 80% of the tender is reserved for these companies.
- 3 in the developmental stage - Quadrant Future Tek, GG Tronics (CG Power), Progota India (subsidiary of Concord Control Systems): 20% of the tender is reserved for these companies.
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