HBL Engineering Share Price Analyzed

Key Points

• HBL Engineering’s stock dropped significantly due to a missed order.
• The decline stems from reduced order expectations for the Kavach system.
• The company has substantial orders in hand for upcoming invoicing.
• Kavach contributes significantly to HBL’s revenue and profits.
• HBL showcased Kavach’s functionality in September 2024, driving initial orders.
• Technical analysis suggests support at ₹755, with potential downside risk.

The HBL Engineering company’s stock price went down a lot – over 13%! This happened because they didn’t get a big order from the Indian Railways. The stock price went down to the lowest it had been in nearly a month, reaching ₹757.70.

This drop wasn’t a surprise. The stock had been falling since January 8th. But even though it was falling, the stock price had actually gone up by 44.05% over the last year, while the Nifty 50 index only went up by 10.87%. This shows HBL Engineering was doing well overall.

As of 10:33 AM, the stock was still down 9% at ₹799.25, while the Nifty 50 index was up 0.72%. The reason for the drop was that HBL Engineering explained they didn’t receive any orders in a competition to build parts for trains called “CLW loco Kavach”. They also said the total orders they expected to get this year were much smaller than they thought.

HBL Engineering expects to make about ₹1,880 crore from the Kavach system this year. They have a lot of orders already scheduled to be delivered next year – around ₹900 crore for train parts and another ₹900 crore for parts for train stations. This Kavach system is really important for HBL Engineering because it brings in most of their business and profits.

Specifically, the Kavach system – which is like a safety system to stop trains from crashing – made up 28.96% of HBL Engineering’s total money they made in the last year (FY25). They even showed off how it works on the West Central Railway in September 2024!

An analyst, Vipin Kumar, said that the stock is near a key support level at ₹755. If the stock price goes below this level, it could go down even further to around ₹700. However, as long as it stays above ₹755, there’s a chance it could recover.

“The future of HBL Engineering hinges on the successful execution of its Kavach projects and the ability to secure new orders.”