Shares of HBL Engineering and Kernex Microsystems are in focus after Moneycontrol reports suggested that the Centre is considering its largest-ever allocation for railway safety, with spending on safety-related works likely to cross Rs 1.3 trillion in FY27, according to people familiar with the matter.
As per a Mint report, the proposed outlay would be around 12% higher than the current financial year’s budget and is expected to be directed towards track renewals, rolling stock maintenance and faster deployment of Kavach, India’s indigenous automatic train protection system. Safety expenditure could account for nearly half of total railway capital expenditure, with overall rail capex projected to rise to about Rs 2.76 trillion in FY27, up from Rs 2.52 trillion in FY26.
The renewed push on railway safety has put companies linked to signalling, train protection systems and safety electronics in the spotlight. HBL Engineering and Kernex Microsystems are among the key domestic players associated with Kavach-related solutions and railway signalling infrastructure, making them potential beneficiaries of higher government spending in this segment.
Kavach has been designated as India’s national automatic train protection system and is designed to automatically apply brakes if a loco pilot fails to respond to signals. While Kavach has so far been deployed on 1,465 route kilometres, Kavach 4.0 is being rolled out over 15,512 route kilometres, although overall coverage remains limited relative to India’s total rail network.
The focus on safety has intensified following recent train accidents, even as official data show a sharp improvement in long-term safety metrics. Accidents per million train kilometres have declined significantly over the past decade, but policymakers are now aiming for a zero-failure regime through greater use of technology-led safety systems.
With the government prioritising signalling upgrades, automatic train protection and maintenance of core rail infrastructure, stocks linked to rail safety solutions such as HBL Engineering and Kernex Microsystems are expected to remain in focus.
