HBL engineering Limited has announced a major order win worth Rs.575 crores from Integral Coach Factory, Chennai, marking a significant business development for the railway equipment manufacturer. The company disclosed this information under Regulation 30 of the SEBI Listing Regulations on January 31, 2026.

Order Details and Specifications

The contract encompasses the supply, testing and commissioning of On-board KAVACH equipment (Ver.4.0), a critical safety system for Indian Railways. The order value of Rs.575 crores is inclusive of 18% GST, representing substantial revenue potential for HBL Engineering Limited.

Contract Terms and Timeline

The order is categorized as a domestic contract and must be completed within 12 months from the award date. KAVACH equipment represents advanced train collision avoidance technology, positioning HBL Engineering Limited as a key player in India's railway safety infrastructure modernization.

Corporate Governance and Compliance

HBL Engineering Limited has confirmed full compliance with regulatory requirements regarding the order acceptance. The company has disclosed that none of the promoters have any interest in Integral Coach Factory, ensuring transparent business dealings.

Business Impact

This order win strengthens HBL Engineering Limited's position in the railway equipment sector, particularly in safety systems. The 12-month execution timeline indicates the company's capability to handle large-scale manufacturing and commissioning projects efficiently. The contract value represents a significant addition to the company's order book, supporting revenue visibility for the upcoming period.

HBL Engineering shares experienced a significant decline of 14% on Friday, January 16, after the company announced its failure to secure a major Kavach tender for locomotive safety systems. The sharp drop in stock price reflects investor concerns over the missed business opportunity in the railway safety segment.

Tender Loss Impact

The company disclosed in a regulatory filing that it did not win any orders in the recently concluded Chittaranjan Locomotive Works (CLW) Kavach tender for 6,300 locomotive units. HBL Engineering attributed this outcome to rival bidders offering more competitive pricing, which positioned them unfavorably in the bidding process.

Revised Market Outlook

The loss of this significant order has substantially reduced the visible Kavach locomotive demand for the current year. HBL Engineering reported that the total Kavach locomotive demand, which previously stood at 18,429 units, has now decreased to 12,129 units following the CLW tender outcome.

The company clarified that its earlier communication to exchanges on December 18, 2025, specifically pertained to the Kavach locomotive business segment and excluded the Kavach station segment operations.

Future Revenue Projections

Despite the setback, HBL Engineering maintains optimistic revenue projections for its Kavach business across both locomotive and station segments:

Station Business Strength

The company's Kavach station business segment appears more stable, with existing orders in hand worth ₹900.00 crore expected to be invoiced during FY27. An additional ₹400.00 crore from station projects is likely to be billed in FY28, providing revenue visibility beyond the immediate fiscal year.

HBL Engineering anticipates more station-related Kavach tenders during FY27, with some projects potentially executed within the same financial year, offering additional growth opportunities.

Near-term Financial Outlook

For FY26, the company projects total Kavach sales of approximately ₹1,880.00 crore, demonstrating continued business momentum despite the recent tender loss. The overall Kavach-related sales estimate for FY27 remains robust at a minimum of ₹1,900.00 crore, indicating the company's confidence in securing alternative locomotive business and maintaining its station project pipeline.