HBL Power signs a contract with Ashoka Buildcon for an order worth Rs 135 cr

On June 26, 2023, HBL Power Systems Ltd (HBL) and Ashoka Buildcon Ltd (ABL) finalised a contract. This agreement entails HBL supplying the Kavach component as part of an Engineering, Procurement, and Construction (EPC) contract secured by ABL in September 2022.  

ABL’s contract with East Central Railway, valued at Rs. 220 crores (including 18% GST), focuses on deploying Kavach and OFC network across a distance of 417 km and 60 locomotives, connecting Pradhankhunta in Jharkhand to Deen Dayal Upadhyay station in Uttar Pradesh.  

The contract between ABL and HBL amounts to Rs 135 crore (including 18% GST) and encompasses the supply and commissioning of all equipment related to the Kavach system, subject to RDSO approval. The delivery and commissioning of the project are expected to be completed within 18 months.  

HBL is one of the three OEMs (Original Equipment Manufacturers) approved by RDSO. The proportion of an RDSO-approved “OEM” vendor’s value in Kavach EPC contracts varies significantly, influenced by factors such as the number of locomotives per kilometre, the number of stations, the length and type (24-core or 48-core) of Optical Fibre Cable utilized. 

On Tuesday, the shares of HBL Power Systems Ltd exhibited a 0.85% increase, reaching Rs 153.35 per share compared to the previous closing price of Rs 152.05 per share.  

In terms of financial standing, HBL Power Systems boasts a market capitalization exceeding Rs 4,000 crore. The company has maintained a nearly debt-free status and has achieved a commendable profit growth rate of 21.4% CAGR over the past five years. 

As of March 2023, for the shareholding pattern, promoters hold a significant stake of 59.08%, followed by 0.92% owned by Foreign Institutional Investors (FIIs), while the remaining 40% is owned by the public. 

Over the course of one month, the stock of HBL Power Systems Ltd has shown an impressive growth of 50%, and it has soared by over 250% in a span of two years. HBL Power should be kept under the radar.