Railway stock jumps 13% after receiving ₹2,465 Cr order for KAVACH loco equipment

Synopsis: Kernex Microsystems (India) Limited received a ₹2,465.71 crore CLW order for 3,024 KAVACH systems, boosting revenue visibility and strengthening its railway safety presence.

This Railway stock, engaged in designing, developing, and supplying railway safety systems, embedded solutions, and turnkey projects for collision avoidance and signalling, jumped 13.27 percent after receiving an order worth Rs. 2,465.71 crore from Chittaranjan Locomotive Works for KAVACH loco equipment.

With a market capitalization of Rs. 2,310.79 crores, the share of Kernex Microsystems (India) Limited has reached an intraday high of Rs. 1,422.50 per equity share, rising nearly 13.27 percent from its previous day’s close price of Rs. 1,255.90. Since then, the stock has retreated and is currently trading at Rs. 1,378.80 per equity share. 

Reason Behind the Surge:

Kernex Microsystems (India) Limited has received a major domestic order worth Rs. 2,465.71 crore, more than the market capitalization Rs. 2,310.79 crore, from Chittaranjan Locomotive Works (CLW). The order involves the supply, installation, testing, and commissioning of 3,024 sets of on-board KAVACH locomotive equipment, as per the latest RDSO specifications. 

This project is to be completed within 12 months from the date of the purchase order. The order awarded by a government entity and contract will significantly improve the company’s revenue visibility and strengthen its position in the railway safety and signalling segment.

Order Book:

Kernex Microsystems (India) Limited had a strong outstanding order book of Rs. 2,563 crore as of September 30, 2025, reflecting an order book-to-total operating income ratio of 13.5x, which provides healthy medium- to long-term revenue visibility. 

However, the order book remains concentrated, with a major order of Rs. 1,730 crore from Chittaranjan Locomotive Works (CLW) for the supply and installation of 2,500 Loco TCAS (Version 4.0) units, forming a significant portion of the total backlog.

Company Overview:

Kernex Microsystems (India) Limited was established in 1991 and specializes in designing, developing, and supplying advanced safety systems and embedded solutions primarily for the railway sector. 

The company focuses on creating anti-collision devices, train collision avoidance systems, signalling equipment, and automatic level crossing gates to enhance rail safety and operational efficiency.

Coming into financial highlights, Kernex Microsystems (India) Limited’s revenue has increased from Rs. 41.22 crore in Q2 FY25 to Rs. 47.12 crore in Q2 FY26, which has grown by 14.31 percent. The net profit has decreased by 4.40 percent from Rs. 6.82 crore in Q2 FY25 to Rs. 6.52 crore in Q2 FY26.

Kernex Microsystems (India) Limited’s revenue and net profit have grown at a CAGR of 66.16 percent and 75.54 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 23.8 percent and 38 percent, respectively. Kernex Microsystems (India) Limited has an earnings per share (EPS) of Rs. 32.1, and its debt-to-equity ratio is 0.51x.

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