HBL Power jumps 6% on optimism for Kavach system, hits 52-week high

Shares of HBL Power Systems Ltd surged 6 percent in early trade on June 6 on optimism for the Kavach system. Thus, hitting a new 52-week high of Rs 129. At 10:00 am the HBL Power stock was trading 4.75 percent higher at Rs 126.90 on NSE.

The rise in stock prices can be attributed to the growing optimism surrounding the potential deployment of the Kavach system, an automatic train protection system, following the recent Odisha train tragedy.

HBL Power Systems is a major player in the transport-related equipment and services sector, making it one of the prime candidates for securing government contracts related to the Kavach system.

Also Read: Explained | How does railways’ collision prevention system Kavach work?

The tragedy in Odisha has prompted expectations that the Indian Railways will prioritise contracts for the implementation of Kavach alongside block signaling and centralised traffic control systems on busy routes. Kavach was developed by the Research Design and Standards Organisation under the Indian Railways, in collaboration with HBL Power Systems and a few other prominent players in the sector.

This system was introduced as part of the Atmanirbhar Bharat initiative announced in the 2022 Union Budget. It works by automatically applying the brakes if the loco pilot fails to do so, thereby preventing accidents.

The unfortunate Odisha train tragedy involved a collision between the Bengaluru-Howrah Superfast Express, the Shalimar-Chennai Central Coromandel Express, carrying approximately 2,500 passengers, and a goods train. The accident occurred when the Shalimar-Chennai Central Coromandel Express, bound for Chennai, derailed and collided with a goods train on the adjacent track. Subsequently, the Bengaluru-Howrah Superfast Express, traveling from the opposite direction on the third track, collided with the derailed coaches.

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