Shares of HBL Power Systems Ltd. are trading with gains of as much as 10 percent on Monday as shareholders expect that the latest train tragedy in Odisha will prod the Indian Railways to spend more on improving safety mechanisms. Shares of another company, Kernex Microsystems are also locked in an upper circuit of 5 percent.

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Over 288 people lost their lives and nearly 1,000 were injured after three trains collided near Balasore in Odisha on Friday. The Train Collision Avoidance System (TCAS), also known as Kavach, was not installed on this route where the accident took place.

HBL Power is one of the manufacturers of the TCAS, with help from the Research Designs and Standards Organisation (RDSO). Kavach was developed by the Research Design and Standards Organisation under the railway ministry, in collaboration with Medha Servo Drives Pvt. Ltd., HBL Power Systems Ltd. and Kernex Microsystems.

The Indian Railways announced that it will install Kavach over 30,000 km of track in ten years.

Kavach was introduced as part of the Atmanirbhar Bharat initiative in the 2022 Union Budget. It is India's very own automatic train protection system. Initially known as the Train Collision Avoidance System (TCAS), it was later rebranded as Kavach, which translates to ‘armour’ in English. You can know more about what exactly it is and its significance here.

Based on its investor presentation, for the nine EPC tenders in 2021, the value of 3,000 km contracts stood at Rs 2,000 crore. HBL had EPC contracts worth Rs 592 crore on hand. While the EPC part is subcontracted, the TCAS part varies for every tender. For the tenders on HBL's hand, their share in the same stands at 70 percent. Each contract awarded to the company takes two years to complete.

Shares of HBL Power are trading 9.2 percent higher at a 52-week high of Rs 122.65.

First Published:Jun 5, 2023 11:45 AM IST