4 Stocks with Strong Kavach Order Books

#2 HBL Engineering Ltd

HBL Engineering Ltd, formerly known as HBL Power Systems, is a veteran engineering company established in 1983.

The firm specialises in manufacturing a wide array of batteries, e-mobility solutions, and advanced electronic systems for sectors including defence, aviation, and railways.

Known for its technological prowess, HBL has evolved from a battery supplier to a key player in critical infrastructure and safety projects. The company maintains a strong global standing, particularly as the world's second-largest producer of Nickel-Cadmium batteries.

The revenue largely comes from its Industrial Batteries segment, which accounted for approximately 71% of total sales in FY25. This portfolio includes Lead-Acid and Nickel-Cadmium batteries used extensively in telecom, data servers, and the oil and gas industry.

A significant growth area is the lithium battery segment, which serves high-tech clients like the Indian defence for undersea vessels and Siemens Germany.

Beyond batteries, HBL generates substantial value from its railway signalling and electronics division. This diverse product mix ensures the company captures demand across defence, telecommunications, and modern transportation infrastructure.

HBL is currently executing an aggressive growth strategy centered on the Indian Railways' modernisation through the KAVACH train protection system. The company recently secured a massive contract worth Rs 1,797.9 m from Banaras Locomotive Works for the latest version. 4.0 on-board KAVACH equipment.

Another significant order worth Rs 838.1 m was accepted from Patiala Loco Works, with a completion deadline set for April 2027. These orders reinforce HBL's position in the railway safety market.

The company is expanding its lithium-ion capacity to meet rising demand from the defence and e-mobility sectors.

HBL Engineering Financial Performance

HBL Engineering reported substantial profitability expansion during 9M FY26, supported by rapid execution of higher-margin railway signalling and Kavach-related electronic projects.

Improved export contributions from battery operations also supported earnings, resulting in a significant rise in both operating and net margins.

#3 Kernex Microsystem (India) Ltd

Kernex Microsystems (India) Ltd is a key player in the railway safety industry, specialising in high-end electronic safety systems and software. Founded in 1991, the company designs, develops, and installs indigenous safety solutions primarily for Indian Railways.

The core operations focus on preventing train accidents through advanced technology, including anti-collision devices and automatic train protection systems. The product portfolio is led by the Kavach system, India's indigenous Automatic Train Protection solution.

Other key offerings include Automatic Level Crossing Gates, Train Collision Avoidance Systems (TCAS), and signal-based railway safety software. Kernex operates exclusively within the railway safety equipment and services segment, which accounted for 100% of its business activities in FY25.

Kernex is expanding its footprint with a total consolidated order book that reached Rs 33,463.5 m by mid-2025. Significant wins include a Rs 24,657.1 m contract from Chittaranjan Locomotive Works for 3,024 Kavach sets and Rs 4,111.7 m from Banaras Locomotive Works.

Growth plans involve scaling production to 450 Kavach units monthly and finalising TCAS 4.0 software.

Future strategies include diversifying into defence-related electronics and moving block systems through strategic joint ventures, aiming to capitalise on the government's massive Rs 2.75 trillion railway capital expenditure budget for safety modernisation.

Kernex Microsystems Financial Performance

Kernex's financial turnaround was largely because of large-scale Kavach project execution and the commercialization of its railway safety systems.

The increase in FY25 revenue reflected movement from order acquisition to execution, while continued momentum in 9M FY26 remained linked to ongoing deployment schedules.

#4 CG Power & Industrial Solutions Ltd

CG Power and Industrial Solutions Limited, headquartered in Mumbai, is a leading 87-year-old engineering conglomerate and a key member of the Murugappa Group since 2020.

As a pioneer in the electrical engineering industry, the company provides end-to-end solutions for the management and application of efficient and sustainable electrical energy.

CG operates through two primary business lines: Industrial Systems and Power Systems, maintaining 18 world-class manufacturing units across India and Europe.

Recently, the company has strategically diversified into the high-growth semiconductor space, focusing on Outsourced Semiconductor Assembly and Test (OSAT) facilities and fabless design to support India's digital ecosystem.

CG's Industrial Systems segment offers induction motors, drives, and railway propulsion systems, contributing Rs 63,756.5 m to FY25 consolidated revenue.

The Power Systems segment, which manufactures transformers and switchgears for utilities and industries, recorded revenue of Rs 35,059.4 m.

Total consolidated revenue for FY25 reached Rs 99,086.6 m. The company also maintains a growing portfolio of consumer appliances, including fans and water heaters, while its new semiconductor division aims to provide scalable global testing services.

This diversified mix allows CG to capture opportunities across the entire power value chain, from industrial automation to grid modernization.

CG is aggressively scaling capacity, notably investing Rs 7,120 m in a greenfield transformer facility to reach 85,000 MVA total capacity by 2028. A critical growth driver is the acquisition of G.G. Tronics, which strengthens CG's position in railway safety systems.

In January 2026, this subsidiary secured a significant KAVACH train protection system order worth approximately Rs 4,333.4 m from Chittaranjan Locomotive Works.

Additionally, CG has secured major export orders, including its largest-ever Rs 9,000 m power transformer order for a US data center project, showcasing its expanding international footprint and commitment to high-value infrastructure sectors.

CG Power and Industrial Solutions Financial Performance

CG Power continued to maintain large-scale revenue growth through its diversified industrial, power, and railway safety portfolio.

Strong order inflows, including Kavach-linked opportunities through G.G. Tronics, supported growth, while disciplined execution in the Power Systems segment contributed to relatively stable profitability despite commodity-related pressures.

Conclusion

As Indian Railways continues expanding Kavach under its modernisation strategy, companies with meaningful participation in this segment may remain in focus.

However, investors should carefully evaluate each company's fundamentals, execution capability, risk appetite, and overall investment objectives before making any financial decisions.

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