- Strong focus on TCAS and TMS; high-growth electronics segment.
- The company continues to have a debt-equity ratio of <0.1x.
- Only Indian company in the market to have high powered Pure Lead Thin Plate (PLT) battery.
- HBL Power continues to focus on indigenous development of its products, with no foreign collaboration.
- The company aims to improve its technology and some of the R&D work in progress is expected to show the benefits from FY27F.
- HBL Power continues to have a healthy working capital and debt-equity ratio of <0.1x.
- In the industry batteries segment, demand for Ni-Cd batteries remains strong.
- The company will focus on improving productivity and reducing costs as Ni-Cd batteries will co-exist with Pb (lead) batteries.
- 4G-5G towers still use lead-acid batteries.
- Prices of Ni-Cd batteries have fallen over the past few months, and their sales are expected to rise in volume terms.
- HBL Power also manufactures lithium-ion batteries on a small scale and so far, the company has incurred a capex of Rs700m while it is looking to incur another Rs700m in the next two years.
- The company has supplied to the defence sector for meeting the needs of its naval and underwater bases.
- HBL Power has been awarded a contract by NSTL/ DRDO to develop prototype modules for lithium-ion batteries for submarine application.
- However, there is demand emerging from Indian Air Force.
- The demand from them will be met in the next few years.
- HBL Power prefers to stay away from capital-intensive products like electric vehicles or EVs due to intense competition.
- The company also makes PLT batteries, which are likely to be exported for meeting the needs of Russian helicopters.
- Indian Railways’ track length is expected to increase by 30,000km over the next few years, which will provide a good opportunity for the TCAS (Kavach) system to be implemented.
- Management said the implementation of Train Management System (TMS) is in progress in the Sealdah division of Eastern Railways.
- Type testing and field trial of the Electronic Interlocking System is also likely.
- The company makes in-house advanced software but does not sell them.
- The advanced software system is being utilized in TMS currently.
- Demand for TMS master control system is expected to increase from FY24F.
- However, the business will garner a low revenue of ~Rs2bn.
- The company aims to supply and install Kavach system in 23 Vande Bharat trains.
- 20 Kavach systems have been delivered, and eight have been installed in four Vande Bharat trains.
- HBL Power expects strong demand for its electronic fuses by FY24F, with 100% in-house technology, for use in grenades and other ammunition and artillery.
- Grenades made by HBL Power have been approved by the Ministry of Home Affairs.
- HBL Power is the only Indian supplier of electronic fuses, and it can also supply to companies making the rest of the grenade.
- The approval of the Indian Army to use the company’s products in its grenades is awaited in FY24F.
- The company is making efforts to ramp up capacity and increase sales by FY25F.
- Torpedo batteries by HBL Power are the only ones which are approved for use in Varunastra.
- Management said the cost of these batteries is ~Rs30mn.
- The battery, motor and homing head unit constitutes ~60-65% of the cost of a torpedo.
- The company has made a bid for Tonbo Imaging and the technical evaluation is going on currently.