Multiple Tenders have been issued to upgrade the Kavach version from 3.2 to 4.0. HBL had said in the AGM that such tenders would be issued but there is not much opportunity here as there are low installations until now.
Snippets from the tender docs
3 Likes
Hi @fabregas, could you share the path/link from where you have downloaded the vendor list. Need the current status so any info on this would be really helpful. Thanks!
Go to the IREPS website - https://www.ireps.gov.in/ - on the top right click on ‘Approval of Vendors’. You will be taken to a new page. On that page you will see a link for ‘Vendor Directory’. You will be asked to login via OTP. After logging in you will see a form. In the form enter details as shown below and click on ‘Proceed’:
11 Likes
HBL-Shivakriti Consortium has been received for an order worth Rs 410.42 crores inclusive of GST at 18prcnt from Ahmedabad Division of Western Railway for supply and installation of way-side Kavach on Ahmedabad-Palanpur section and Ahmedabad-Samakhiyali section on Ahmedabad Division of Western Railway.
7 Likes
HBL reported lacklustre quarterly results for Q3 FY 25.
Sales down from 600 cr to 451 cr ( y-on-y)
EBIDTA down from 113 cr to 94 cr.
PAT down from 79 cr to 65 cr.
Demonstrates the lumpiness in quarterly numbers.
21 Likes
- Below was HBL guidance issued in May 2024:
Post that, there have been no further guidance revision. Assuming this is still management view, TTM revenue is 2100 Cr, EBIDTA is 444 Cr. It seems HBL is on par to meet the guidance, at least for EBIDTA.
- As expected, major moderation in Electronics, due to delay in Kavach orders.
Hopefully this should start reversing from FY26, given they have won orders close to 2000 Cr now.
- Employee benefits continue to increase. Interpreting this as ramp up to execute new orders, which is good news.
Key questions to my mind are -
-
Will Kavach continue to provide good flow of orders for a few more years ? As the competitive intensity increases, does it impact incremental revenue and margins? To show Y-o-Y growth, there has to be larger tenders and HBL has to win more compared to FY26.
-
Will other businesses grow significantly? How will EV trucks shape up? Will only know in a few more quarters.
-
Will core business of industrial batteries continue to slow down? If not, what is the sustainable growth rate here?
Disc - invested.
18 Likes
Florintree leads Rs 175 cr funding in defence tech startup Tonbo (Source: Economic Times)
HBL is invested in Tonbo.
12 Likes
Is this a completely different opportunity or would the approved/developmental vendors under existing Kavach tenders are eligible?
5 Likes
Actual video is here , https://youtu.be/ZZ5BlJazbcA?si=i0Ts1xiL1CK22VWn
7 Likes
Bit late in posting this. I work in the defence sector and I had been to an international defence exhibition in Feb 2025. The exhibition was called IDEX Abu Dhabi. It is the biggest middle east focussed defence exhibition. UAE, Saudi etc are rich countries which almost entirely rely on foreign military equipment. Any company which is serious about exports will come to this exhibition.
HBL had a stall at this event. I interacted with the HBL rep at the stall. He mentioned that HBL has been attending this exhibition for a long time. This was the first time they also had Electronic Fuzes at their stall. Otherwise its only defence batteries. He mentioned that they have been overwhelmed with enquiries for electronic fuzes.
It has been difficult for HBL to get orders from Indian Army. Would be a positive surprise if they get any export orders.
78 Likes
Update 1 On potential new growth driver CTC
CTC is a real time Train Traffic Control and Indication System for efficient monitoring, operations, maintenance, diagnostics, remote Command & Control of Train Movements. The prime difference between TMS and CTC is that CTC can perform remote control and Automatic Route Setting by the System, using rules engine, right from the Operations Control Center. CTC will help with changing routes, avoiding delays, managing traffic and during natural disasters.
According to industry experts, CTC is much bigger opportunity than TMS and as big as Kavach opportunity.
As mentiond in Kernex in recent Analyst meet, 900cr worth of 4 tenders is already released in 2025 for CTC Development orders and full fledged execution will start 2-3 years down the line.
Two CTC tenders are out as of date
Design, supply, installation, testing and commissioning of CTC (Centralized train control system) system in Surat-Ahmedabad and Vadodara- Godhra section of Vadodara division of Western Railway
Design, supply, installation, testing and commissioning of CTC (Centralized Train Control) system in Churchgate-Dahanu Road-Surat Section (267 km) of Mumbai Division of Western Railway
As of today, given the criteria for OEMS for CTC leaves only HBL/Kyosan/Siemens in contentions (same was mentioned in Kernex Analyst meet)
Source IREPS Portal, https://www.tsts.in/centralized-traffic-control/
Update 2 on Grenades - Fuzes
As conveyed in HBL 2024 AGM, some tenders have started coming in from BSF and CRPF
Further Tenders for fuzes by Munitions India (which means they had won the above tenders and will be primary supplier ) and now a tender for HBL on STE (Single Tender Enquiry) basis for 28,126 fuzes
Source GEM Portal and CPP Portal
UBGL Hand Grenade CRPF Tender.pdf (2.7 MB)
SD Fuze tender from Munitions India.pdf (253.3 KB)
Fuze HBL.pdf (1.2 MB)
63 Likes
So some background on this. These grenades (with electronic fuzes) were developed at ARDE, which is a DRDO lab (you can see their name in single tender enquiry “… as per ARDE drg no. …”), where HBL was a development partner. Which means that ARDE initiated the project through tendering process and HBL won the tender and subsequently successfully developed the product. Now the question is who owns the IP of this product? The IP is owned by DRDO. Any existing IP owned by HBL which was developed before the commencement of project but was used in the product developed under this project will be HBL’s property. So basically the MIL grade battery which is used in this product will be HBL’s property. No other manufacturer makes these batteries in India. BEL and ECIL import these batteries from Israel and South Africa respectively for use in 155mm artillery shell electronic fuzes.
Now since DRDO owns the IP they can do “transfer of technology” (called as ToT) to any Indian entity based on certain criteria. Usually criteria such as revenue, explosive license and history of supplying explosive based products to the Indian armed forces etc.. This is how Munitions India Ltd (MIL), Solar, Adani etc. get technologies for DRDO products such as Pinaka (122mm rocket) and ULPGM (UAV launched precision guided missile).
Coming back to UBGL grenades, MIL got the ToT from DRDO for this product. Now the fact that MIL won the tenders by outbidding HBL tells us that MIL quoted lower than what HBL was willing to sell them for. Since no one apart from HBL makes these products MIL issued a RFP on a single bidder (HBL) to procure them. Now this begs these questions - is MIL willing to pay HBL’s price? Why will HBL sell them to MIL at a price lower than the one quoted to CRPF/BSF? If MIL is willing to pay HBL’s price then this implies that they will be selling these products at a loss.
So unless HBL agrees to sell them at a lower price than the one quoted by MIL to CRPF/BSF, I don’t see any revenue coming out of these tenders for HBL. This is just a time wasting tactic by PSUs to ensure that they pull down their competitors. Nobody wins in this drama and the losers are the Indian Armed forces, the private sector and Indian tax payers.
24 Likes
Hitherto these grenades were imported by Army from Belgium and other countries (looking at older tenders). Also the Fuze contains batteries which are very difficult to make. Doing a ToT itself is not sufficient, neither for this nor for most defense products. For that matter incase of most of the batteries that HBL/HEB (the two large defence battery manufacturers) make the technoclogy/IP is available. BEL and ECIL with all the government backing and money still can’t make ‘artillery fuze’ batteries and rely on imports for the same.
HBL is only selling the Fuze and is an STE for the same, not the Grenade. CRPF/BSF tender was for grenade. The only reason HBL is STE is because no one else was able to develop the fuzes. MIL will bring in the rest of the components like upper body, explosive, propellant, cartridge case etc.
31 Likes
Img from SOIC
Dec 24 order worth 1856crs which is to be completed in 12 months, If they start delivering from 1st Jan then they’ll have to do 460crs a qtr. So Q4 revenues should at least be double of Q3 with higher margins
24 Likes
We can’t expect anyone to start deliveries of December loco order from 1st Jan 2025. Kernex had mentioned in their presentation that loco installations are expected to start from June. I would expect similar timeframe for HBL. So Q4 FY25 might be average but every quarter in FY26 should be great.
22 Likes
HBL receives approval for RDSO Version 4.0 of Kavach System. They are the first company to receive it. Kavach Order book of Rs. 3,763.83 cr to be executed within 2 years
Attached: Snapshot of the announcement
Disc: Invested and Biased
19 Likes
HBL Q4FY25 Result
Yearly margins have increased. There has been loss in the ‘associates’ for the quarter.
The industrial batteries’ margins have increased significantly. The assets have seen an increase in all the segments. The electronics segment had negative margins, could it be due to front-loading of expenses (for being prepared for the Loco orders), if anyone can highlight?
Management announcement post result- to do Rs. 3000 cr revenue in FY26
Discl: Invested and Biased
22 Likes
HBL receives another Kavach order. This would be ~Rs. 101.55 cr from IRCON International. The details of the contracts have been highlighted in the image below. This is the same order declared by IRCON last week, where their total order value was ~Rs. 253.6 cr
This order takes their Kavach order book to Rs. 3865.43 cr
13 Likes
Just an observation from the latest order received, seems the cost of Kavach per KM has come down significantly. Keeping the 2 loco aside (which is very small amount compared to total order), the per KM cost seems to be 12Lacs, which is significantly lower than earlier tenders.
Anyone knows reason this has come down?
5 Likes