HBL power, Kernex microsystems shares spike amid hopes that govt will fast-track 'Kavach' adoption

HBL Power Systems' stock price increased by nearly 10% to reach a new 52-week high of ₹123 while Kernex Microsystems' stock price opened at its 5% upper circuit of ₹297 in early trade on Monday.

A mint report citing market experts, says that the stocks are rising on expectations that the government will prioritise the Kavach system deployment contracts following horrific Odisha train accident. These two companies are two of the major suppliers of transportation-related goods and services.

Both stocks have been rising over the past few days; shares of Kernex Microsystems have increased by almost 16% over the past week, while those of HBL Power Systems have increased by more than 13% in just three sessions of June.

What is ' Kavach'

On 23 March 2022, the Ministry of Railways announced a significant step towards enhancing the safety of train operations in India with the development of the indigenous Automatic Train Protection (ATP) System called Kavach.

Kavach has been developed to enhance train operations in conditions such as severe fog, and to help locomotive pilots avoid Signal Passing At Danger (SPAD) and overspeeding. The device ensures improved control over train speed and averts potential accidents by automatically deploying brakes as needed.