 "HBL Engineering zooms 78% in 3 months; stock trades at new high")
Stock price of HBL Engineering today
Shares of HBL Engineering (HBL) hit a new high of ₹994.20, as they rallied 7 per cent on the BSE in Monday’s intra-day trade on the back of heavy volumes amid a healthy business outlook.
In the past three months, the stock price of the industrial products company has soared 78 per cent from a level of ₹557.50 on the BSE. In the past six months, it has more-than-doubled or zoomed 113 per cent.
At 02:25 PM; HBL was quoting 6.5 per cent higher at ₹992.60, as compared to 0.69 per cent rise in the BSE Sensex. The average trading volumes at the counter jumped over three-fold, with a combined 5.19 million equity shares changing hands on the NSE and BSE.
HBL Engineering overview, outlook
HBL is engaged in manufacturing industrial batteries, electronics, and engineered products. HBL’s products cater sectors, including telecom, UPS, defence, and railways in India. The company’s presence spans continents, including North America, Europe, and Middle East, facilitated through its two subsidiaries - HBL America Inc. and HBL Germany GMBH.
CareEdge Ratings expects HBL to report a healthy growth in its total operating income, supported by favourable demand prospects for its diversified product portfolio and healthy order book. The company is also likely to sustain its operating margins in line with FY25, aided by its product mix and established market presence.
With a prudent capital structure and comfortable liquidity position, HBL’s financial risk profile is expected to remain healthy. However, the outlook may be revised to ‘Stable’ if revenue growth and profitability fall short of expectations, impacting the overall financial performance, the rating agency said in its rationale.
CARE Ratings expects HBL to maintain this positive momentum and improve its operational and financial performance in coming years backed by a healthy demand for defence and industrial batteries segments. In addition to the regular order book, new orders for installation of Kavach systems on locomotives and trackside upgradation provides revenue visibility for the medium-to-long term, the rating agency said.
HBL has been strategically reducing reliance on the telecom segment, with its revenue share declining in FY25, while focusing on higher-margin products such as Ni-Cad and lithium-ion batteries, alongside expanding exports to the Middle East, Asia Pacific (APAC), Africa, and Europe. Revenue visibility is further supported by multi-year orders from the railway sector, including Kavach systems, Train Collision Avoidance System (TCAS), Train Management System (TMS), and signalling works.
Meanwhile, most of HBL’s current businesses will continue to grow, at a smaller rate as the size of each business becomes large. HBL in its FY25 annual report said that the company expects cash surpluses in the next five years that will exceed internal demands, including R&D and increased dividends. These surpluses will be invested in other entrepreneurial companies, adjacent to HBL businesses.
The company expects that the demand for lead acid batteries for train lighting applications will remain strong for at least the next couple of years. India's metro rail network is expanding rapidly, with numerous projects in various stages of development across the country. HBL supplies Nickel Cadmium and Lead acid VRLA batteries for stationary applications such as UPS, Signalling, Communication and lighting. It also supports the network with supply of Nickel Cadmium battery for rolling stock application, to metro network operators and metro car OEMs.