3 Railway Safety Kavach Stocks

Kavach is an indigenous automatic train protection system developed for Indian Railways to prevent collisions, signal passing at danger, and excessive speeding.

Several listed Indian companies are key players in its manufacturing, deployment, and related infrastructure, positioning them as potential beneficiaries amid ongoing government tenders.

Here are three such stocks.

#1 RailTel Corporation

First on our list is RailTel Corporation.

The company undertakes railway projects including new lines, gauge conversion, electrification, metro systems, bridges, workshops, and port connectivity.

RailTel Corporation of India actively participates in railway kavach projects as an implementation partner under the Ministry of Railways.

The company has secured multiple high-value contracts for deploying the indigenous Train Collision Avoidance System (TCAS), leveraging its telecom and signalling expertise.

Financial Highlights of RailTel Corporation of India

Source: Equitymaster

On the financial front, the company reported revenues of Rs 9,514 m vs Rs 8,435 m YoY. The net profits of the RailTel Corporation surged to Rs 761 m vs Rs 726 m YoY.

The company's robust order book is expected to drive revenue growth in the coming years. As of 30 September 2025, the total order book stood at Rs 82.51 bn.

And far as Kavach is concerned, the company has won two orders, which are under execution. RailTel will be participating in further tenders for Kavach, as per recent commentary from the management.

RailTel Corporation of India benefits from strong government support as a Navratna public sector undertaking (PSU) operating under the Ministry of Railways.

#2 Kernex Microsystems (India)

Kernex Microsystems (India) Ltd is a Hyderabad-based small-cap company specialising in railway safety systems, particularly as an authorised OEM for the indigenous Kavach Train Collision Avoidance System (TCAS), with RDSO approval for development and deployment.

Financial Highlights of Kernex Microsystems (India)

Source: Equitymaster

On the financial front, the company reported Q2 FY26 revenues of Rs 471 m vs Rs 412 m YoY. The net profits of Kernex Microsystems was Rs 65 m vs Rs 68 m YoY.

Recently, in October 2025, Kernex Microsystems (India) received an approval from Research Designs and Standard Organization (RDSO) for version 4.0 of the Kavach.

Following the approval, the company can begin deliveries of Kavach System (Version 4.0) against total accumulated orders received along with consortium and JV partners from 1 April 2024 to till date amounting to an aggregate value of Rs 33.46 bn.

This should help sustain revenues for the company in the coming quarters.

#3 HBL Engineering

HBL Engineering Limited, formerly HBL Power Systems Ltd, is a Hyderabad-based company specialising in railway safety systems, notably as an authorised OEM for Kavach Version 4.0.

Financial Highlights of HBL Engineering

Source: Equitymaster

On the financial front, the company reported Q2 FY26 revenues of Rs 12,229 m vs Rs 5,210 m YoY. The net profits of HBL Engineering surged to Rs 3,873 m vs Rs 760 m YoY.

The company recently received an acceptance from the West Central Railway for trackside KAVACH equipment at stations. The total value of the contract for the company is Rs 541 m.

The total order book of the company as of August 2025, stood at Rs 40.83 bn.

This should provide revenue visibility for HBL Engineering in the coming quarters.

Should You Consider Rail Kavach Stocks?

Rail Kavach, India's indigenous train collision avoidance system, drives opportunities for select railway stocks amid solid safety budget push by Indian Railways.

The big players have large order books, but valuations and execution risks are something investors need to examine. Investment decisions should be based on fundamental analysis, holding period, and risk tolerance.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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