The last kavach order is station tcas not track tcas ( can differentiate between the 2 by observing that station tcas order in most cases will mention number of stations as well )
Railways have divided the tender into many parts epc part (HBL not participating in this) , track part (lot of previous tenders) that will be 40-50L per km, station part ( this tender) that will be 1-2cr per station and loco part (1st tender) 70-80L per loco
So as of today no change in pricing
A consortium led by Dineshchandra R Agrawal Infracon Pvt Ltd, along with Siemens Ltd and Siemens Mobility GmbH, has secured a âš4,100 crore contract from the National High Speed Rail Corporation Limited (NHSRCL) for Indiaâs first bullet train project. The contract includes Siemens Ltdâs share of âš1,230 crore for the design, installation, and long-term maintenance of advanced signalling and telecommunication systems. Under the agreement, Siemens will implement European Train Control System (ETCS) Level 2-based signalling and train control technologies. Execution period is 54 months.
HBLâs investor presentation lists âelectronic signallingâ and âTrain Management System (TMS)â as their focus areas. HBLâs TMS System is certified for SIL2 by Bureau Veritas Spain. I am curious if HBL also participated in this tender and lost out. Is anyone tracking tenders released for TMS/CTC?
Read more at:
I am not sure about this but there is something very interesting that was brought to my attention by @satishwe. There is a pilot tender from Kolkata Metro tender for
âSurvey, Design, Supply, Installation, Testing & Commissioning of Moving Block Kavach system with ATP, ATS, ATO features compliant with IEEE 1474 and IEC 62290 standards in Yellow line from Noapara station to Jai Hind station of Metro Railway, Kolkata.â
This could be very interesting as ATP,ATS. ATO for Metro/Urban Railway systems is totally dominated by European players whose solutions are very very expensive. With increasing Metro penetration across Indian cities this can be a very large opportunity for Indian players to come and replace the Europeans.
I am also attaching the pre-bid queries and their responses by prospective bidders and Metro Railways Kolkata respectively. As per this the three Kavach players (HBL/Kernex/Medha) and Siemens were the prospective bidders present in the meeting.
Prebidclarification_1.pdf (3.0 MB)
While this is very interesting. Based on my understanding
Moving Block is far more complex than existing KAVACH implementations as it requires everything to be tracked, analysed and implemented in real time with zero error in a scalable way.
HBL has not mentioned any capability of Communication-Based Train Control (CBTC) system in past annual reports. It mentioned about a Delhi - Merrut 17 km CBTC tender but only as an illustration (that tender was awarded to Alstom
Based on whatever little I can understand, questions from Medhavi sound more in depth and architecture level and around scalable integrations. It seems like they have better understanding of what is being asked to do.
Disc : Invested
I agree with you that Moving Block + CBTC is far more complex than existing Kavach implementations. A pre bid query meeting is too little to judge HBL vs Medha here. There are better data points in terms of HBLâs delivery of TMS for multiple sites vs Medhaâs inability to do so for one of the tenders that they won a few years back.
Anyways HBL vs Medha is not the moot point. The moot point is that in order to get the certificate you have to prove your capabilities for which you need a test and trial line and the Rly body (in this case Kolkata Metro) that provides the line has to bear the cost. It is a difficult choice because you can get an expensive European company to do the job and which is the norm or take a risk to provide a line for testing to Indian companies which may or may not deliver. I am glad Kolkata Metro came forward for this highly required indigenization push. Despite being invested in HBL I wouldnât mind if Medha delivers on this as well.
Completely agree. Any indigenous deployment opens up new deployment opportunities.
This looks like an Interesting development.
In one of the management meetings organised by Kernex, they mentioned CBTC briefly under the possible âFuture Opportunitiesâ they are exploring. They said that they have approached the metro (didnât mention which metro body) to provide a Communication-Based Train Control (CBTC) solution. This could be made from the Kavach conversion to CBTC, where there are no Indian players currently. Only MNCs like Siemens, Thales, etc have it.
They also mentioned CBTC without explaining it in detail in their Feb 2024 presentation
Please correct me if I am wrong, whether moving block Kavach for metro is similar to CBTC. From what I understood, Moving block Kavach is the Indian version (developed to suit Indian conditions) of CBTC, and it is functionally similar.
This is regarding UBGL grenades with electronic fuzes tender details posted here by @Rokrdude. Turns out I was wrong. HBL has strategically partnered with Munitions India Limited (MIL) to deliver electronic fuzes to the Indian armed forces. As per information from my channels regarding the grenade fuzes, the deliveries by HBL to MIL have started. Acceptance testing and inspections are going on. We should be able to see some revenue (advance etc.) in Q2 and balance in Q3.
You are right.
Apart from these grenade fuzes there are reports (though verbal interaction with MIL representative) that the HBL-MIL consortium has won tenders in Emergency Procurement from Indian Navy for upgrading older mechanical fuzes to electronic fuzes for some missiles in the Indian Navy inventory. So it looks like the electronic fuzes bet has finally started paying off. Still very early days but the future looks bright.
There was a press release yesterday by the Ministry of Railways regarding Indigenously Developed Kavach 4.0 Commissioned on Mathura-Kota Section of the Delhi-Mumbai Route.
This section was awarded to HBL for installation of v3.2 and since HBL was the first company to get v4.0 approval about 2 months back, it seems like HBL is the one who was involved in this upgrade.
Also there was a concall conducted by Quadrant Future Tek yesterday. Management mentioned that only 2 companies have received KAVACH v4.0 approval so far. Until this approval is received the Loco KAVACH installations cannot start. We know HBL was the first one to receive this approval about 2 months back. So HBL has a headstart over others for the execution of Loco KAVACH tender.
And it was again confirmed in that concall that Dec 2025, specifically 11th Dec 2025, is a hard deadline for the execution of the Loco KAVACH tender. Any incomplete installations will go for rebidding in new tenders. However someone also asked a question on whether Railways will give an extension since there has been a delay in awarding KAVACH v4.0 approval for all vendors. There was no conclusive answer to this by the Quadrant management. But if there is no extension given, then HBL will have an advantage since they will be able to bid for share already awarded to other companies.
Similarly, another image from the press release.
If these images are actual installation images of the route in question, plus going by the logic of @fabregas, which appears true as HBL has already won the contract for the same route, and it was facing a delay in installation (Deadline to install 'Kavach' on Mumbai-Delhi-Kolkata train route extended to December '25 - The Economic Times)
It would be possible that instead of installing the old version in the un-executed contracts won in 2022, they are pivoting towards an already developed and approved version (there could be some upgradation contracts as well)
Regarding the loco orders, it appears to be a smart move from HBL for bidding contracts only to the extent they thought they could execute with the possibility of getting more contracts if there is re-tendering (not sure, but Railways could give some extension considering only 2 have approvals as yet; if they donât it opens good opportunities for approved vendors like HBL)
Q1FY26 Results are out
It was the highest ever quarter for the electronics division, and the revenue from this division is expected to increase further in subsequent quarters as we see a full quarter of execution compared to Q1. The Loco Kavach orders would be contributing to this growth.
Good to see an increase in segment assets across all the divisions, especially across Defence Batteries and Electronics.
Not the station or wayside, but related to loco used during the travel
Source: North Central Railway completes Kavach trials on Mathura-Palwal section - Indian Infrastructure
HBL AGM 2025 highlights :
I got an opportunity to attend the agm and participate in the QnA , please find the Partial notes from AGM.
Highlights from Chairman Commentary:
The cover of our last annual report had shown that the sales for FY25 will be flat, that there will be no growth, and in fact, there was a mild decline, but that was still close to what we expected. And the reason, of course, is the Kavach orders. We expected some Kavach orders to begin, and every monthâs delay in the receipt of those orders will lead to a delay in our deliveries. The cover also showed a steep increase in FY26, and the surprise now is that the increase will be even more than expected. Again, the primary reason is the drought of our orders has now become a flood, and this is typical of these kinds of customers we have.
The other point about the annual report cover this year is I used the words ânext orbitâ. Somebody wrote to us saying, âWhat does orbit mean?â. I thought it is something everybody understands, but what I meant was that if you look at the last five years, which we have summarized for you in the MDA, you will notice that the preceding three years we were stuck around less than around 1,000 crores to 1,500 crores. In the previous two years, we got stuck around 2,000 crores, but from now on, I think it will not be lower than 3,000 crores, and therefore itâs the next orbit. We are budgeting this yearâbudgeting is the word, Iâm not forecasting, we are careful not to say it is management guidanceâbut we are budgeting for 3,000 crores in sales of this fiscal year.
Because of the publicity given to the American tariff decisions, some of you may be wondering whether it has any impact on our sales. No, there will be no impact because our budgeted sales are only 50 crores, and all of it is not lost. People are still saying that there may be an agreement and something will settle down. But our customers are those who cannot easily switch from one to the other just because of an increase in price. So they will negotiate, we have to compromise, and theyâll also budget something, and if the tariff remains in the future, they will plan for this on their own.
The big story of the year, of course, is Kavach. As explained in the management discussion and analysis, the business in the next two fiscal years should be almost as good, definitely, and perhaps better in the next year than this year. So there could be a decline in FY28, and how much depends upon many unknowns. At this point of time, out of five companies to whom orders were given by the railway ministry, only two companies are qualified. The other three are yet seeking to get qualified. Nobody knows when that will happen. And we had a lead on our competitor by about, I think, 8 to 9 weeks. So I see quite clearly that Kavach is going to continue to be important. By FY28, even if Kavach falls a little bit, I donât see any reason to worry because I expect the growth in sales to continue due to two reasons. One, the TMS, which the railways have been too busy to pursue, will now become⌠theyâll have time. And more than that, the sales of electronic fuses for ammunition, on which the company has been working for 20 years. There have been a lot of favourable developments and enormous progress made by our team. But all told, we are going to enter a niche market that is as sound and, in investor language, they call it a moat. I like that word. This is a moat that not even three people can cross.
So overall, the visibility for the next three years exists, and beyond that, you have to take my word for it because a lot of developments I donât want to talk about unless there is something firm on the ground. And the MDA had said that weâre hoping to get 4,000 crores by FY30. As of today, that still seems a reasonable number. That is enough about the current business prospects.
Highlights from Chairman response of QnA:
As of today, we are the only company in the country that makes batteries for fuses. And let me assure you that in the whole world, there may be five or maybe three, four countries with five or six factories. Thatâs it. This is important to keep in mind how we got into it, and then we tried to look at the rest of it and found that it is also going to take time. We started working on fuses in 2005âfor 20 years.
So, recent RFI, and why the fuse business has suddenly grown. India wakes up in a crisis. Everybody has now realized that this operation, whatever extraterritorial activities it may have, highlighted the threat of drones. You canât launch a missile at a drone, nor rely upon a soldier firing a machine gun at a drone. The army had an air defence wing with a senior lieutenant general in charge, and there was heavy import. The foreign supplier of the fuse stopped supplies. The army then asked, âWhere is HBL?â HBL had been aware of this device for a long time, but earlier there was no interest. Then came urgent requests: âCan you give me in three months? Can you give me in six months?â HBL replied that it would take time since such items are not readily available.
One of the most amazing stories is the grenades. When you throw a grenade is it has to take a few seconds before it lands and explodes. We had this attack on the Taj Mahal Hotel 26/11. Soldiers from a special forces that were asked to get into the hotel and drive the terrorists outâtwo died. One died because when he threw the grenade at the terrorist in the corridor, it didnât explode on time. That fellow threw it back. It exploded near the person who threw it. Second one died because it exploded too early. Now, why this happened? Because they were using mechanical fuses. So the army wakes up again, and by this time the Defence R&D organization, ARDE, was very helpful to us in getting us introduced to these customers because otherwise, theyâre not authorized to talk. So we have developed fuses for grenades, and we are certified to produce grenades. We have got orders for grenades, so we are using our fuses in these grenades. I think Iâve answered basic questions on the fuses. And why Iâm saying it will be '28 is if we are at this stage today and Iâm not going to jump and produce more than I can safely deliver, Iâm taking the next year for that ramp-up period. The recent RFIs were all connected with air defenceâthe 23, the 30, the 40mm.
This stock tested my patience ( and probably other investors too) over last 2 years. Going by management commentary of 3000 cr top line we are looking at 40-50% growth this year.
Ps : Holding and no recent transactions.
Thanks for the excellent write up Satish. Were there any questions on succession? HBL talked about it in the AR. Any further specifics would be helpful.
Disc- invested.
My last & the best AGM of the year!!
@satishwe has captured the proceedings almost verbatim, so while avoiding repetition adding a few more points from the event. (There might be some inaccuracies, so please do your own research):
We have a decentralized structure, and each division is growing on its own. So portfolio premium should be applied for HBL
We will have surplus cash from FY26 onwards. We will have one more dividend in March 26, which will be same as now.
We are investing surplus cash in small companies using the Mittelstand model. It is like Venture Capital. They are in areas in which (âŚthere are adjacencies, I think. Could not hear properly what he said)
On Succession, we plan to move to a holding company structure where each division operates independently with a CEO, and the Corporate Office will be at the center
TMS & CTC - Orders will be smaller in size about Rs.100 to 300 crore per year. Not as big as Kavach
e-Trucks - We will be in 55-ton and 35-ton trucks, only there the business will be profitable
He said many companies invested in Lithium-Ion batteries and now having second thoughts as the business is not profitable. We stayed away from it
Torpedo Motors (if I heard correctly) - We will start selling in FY28
Homing Heads - It will take 3 years to get qualified
Nickel Cadmium batteries - It is a mature industry, but the number of suppliers is limited. We are exporting, the margins are better in exports than in the domestic market. Most of our exports are coming from this or defence batteries
Lithium-ion batteries for shipping - I may have something to say in Dec or March
(Disc.: Holding)
"Succession planning has been clearly defined. Iâm going on record as saying that we are not interested in finding a single CEO, but we want to build this company into a sort of holding company structure, and each division, of which there are nine as I explained, will be an actually independent company. It need not pay its own financial return, report its own financial results; that can be done by the corporate office. " - Chairman
While its clear that growing 50% and 3000cr this yr is a given, I am more concerned abt the projection for fy30. So this basically means mgmt expects co to grow by a CAGR of just 10% from Fy27-30 with a high likelyhood of lower margins than Fy26. Are we in for a peak margin peak valuation for the company ?
From 3000 cr in FY 26 to 4000 cr in FY 30 .. that is just 7.5% CAGR for 4 years, so not even 10%. I wonder why would management give such a tepid growth guidance !
