Shares of HBL Power Systems and Kernex Microsystems surged on June 5. HBL Power shares leapt 10 percent to a a fresh 52-week high of Rs 123.70, while Kernex Microsystems opened at the 5 percent upper circuit of Rs 297.55.
The rise in stock prices can be attributed to the growing optimism surrounding the potential deployment of the Kavach system, an automatic train protection system, following the recent Odisha train tragedy. HBL Power Systems and Kernex Microsystems are major players in the transport-related equipment and services sector, making them prime candidates for securing government contracts related to the Kavach system.
Also Read: Explained | How does railways' collision prevention system Kavach work?
The tragedy in Odisha has prompted expectations that the Indian Railways will prioritise contracts for the implementation of Kavach, an advanced protection technology, alongside block signaling and centralised traffic control systems on busy routes. Kavach was developed by the Research Design and Standards Organisation under Indian Railways, in collaboration with HBL Power Systems, Kernex Microsystems, and Medha Servo Drives.
This system was introduced as part of the Atmanirbhar Bharat initiative announced in the 2022 Union Budget. It works by automatically applying the brakes if the loco pilot fails to do so, thereby preventing accidents.
At 12.47 pm, HBL Power shares were trading at Rs 123.20, marking a 9.71 percent increase, while Kernex Microsystems shares were trading at Rs 297.55, up by 4.99 percent on the National Stock Exchange (NSE).
Both HBL Power Systems and Kernex Microsystems have been rising for the past few days. HBL Power Systems' shares have gained over 13 percent in just three sessions of June, and Kernex Microsystems' shares have increased by around 16 percent during the same period
The Odisha train tragedy involved a collision between the Bengaluru-Howrah Superfast Express, the Shalimar-Chennai Central Coromandel Express, carrying approximately 2,500 passengers, and a goods train. The accident occurred when the Shalimar-Chennai Central Coromandel Express, bound for Chennai, derailed and collided with a goods train on the adjacent track. Subsequently, the Bengaluru-Howrah Superfast Express, traveling from the opposite direction on the third track, collided with the derailed coaches.
These recent developments have sparked optimism among investors, as the government focuses on prioritising safety measures and the deployment of the Kavach system. These companies are well-positioned to benefit from potential government contracts.
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