In today’s world, we’re constantly surrounded by a symphony of technology. From the quiet hum of our laptops to the dazzling display of our smartphones, these marvels rely on a hidden partnership between batteries and electronic solutions. Batteries and electronics are the unsung heroes of our modern world.
Their seamless partnership is so deeply embedded in our daily lives that we often take them for granted. But as technology continues to advance, their roles will only become crucial in shaping the future. HBL power systems being a prominent player in the Indian battery and electronic component manufacturing sector play a pivotal role in building a better future.
With its dedication to providing quality products HBL emerged as a trusted name and investors gained confidence as a result of that HBL power system shares rose to a 52 week high of 612 rupees compared to a 52 week low of 97.30 rupees. It gave a mammoth return of 628% within a year. Will it continue to rise? Come let’s have a deep look into the performance of HBL power systems.
Business overview of HBL power systems
HBL Power Systems is based in Hyderabad, India. HBL NIFE Power Systems Limited (formerly Sab Nife Power Systems) is a well-known manufacturer of batteries and power systems. HBL Power Systems came into existence in 1999 through the merger of SAB Nife Power Systems Ltd (established in 1986) and Hyderabad Batteries Limited (HBL), incorporated in 1977. With Indigenous efforts, the company identifies and fills the technical gaps in India. They have their manufacturing facilities in parts of Telangana and Andhra Pradesh.
HBL has a presence in America, Europe, and the Middle East. The vast majority of its revenue comes from battery sales within India. They cater to a wide range of industries, including defense, railways, telecommunication, power, and even the emerging electric vehicle market. HBL became a public limited company and listed on the stock exchange on January 4th, 2007.
HBL predominantly operates in three primary segments which include Industrial batteries, Defence & Aviation, and Electronics. Out of these segments, HBL generated 69% of its revenue from industrial batteries followed by Defence & Aviation which occupies 17% and Electronics occupies for 11%
Product overview of HBL power systems
Telecom Tower Batteries
Most telecom batteries today are Valve Regulated Lead Acid (VRLA). These batteries are known for their reliability, long service life and deep discharge capabilities making them ideal for backup power in remote locations telecom towers. HBL is currently positioned in 3rd rank in terms of market capitalization and this segment is dominated by Amara raja batteries and Exide industries.
Rail & Metro Coaches / Loco Batteries
HBL manufactures batteries for rail and metro coaches. The batteries are made in the form of Lead acid or Nickel Cadmium Alkaline Batteries, and globally speaking HBL is the 2nd largest producer of Industrial Nickel Cadmium Batteries.
Batteries for Oil and Gas and Utility Industries
HBL power system supplies batteries in the form of nickel cadmium pocket plate to oil and gas industries. These batteries are being used in this industry because of its reliability and safety. Reliance industries is one among the customers who uses HBL batteries.
DC Power Backup Systems
The company produces pure lead tin batteries to deliver high power for a shorter duration. They are used for stationary engine starting, tanks and army trucks which operate at -30 degree celsius. HBL is the only producer in India to have an in-house development of technology to manufacture these batteries.
Torpedo Batteries
HBL is one among the 2 suppliers in India who supplies batteries for Torpedo Propulsion to the Indian Navy. Torpedo batteries are specialized batteries designed to power torpedoes, underwater weapons launched from submarines or surface ships. HBL also has two contracts from DRDO/NSTL for developing AI AgO torpedo batteries.
Missile Batteries
HBL manufactures, designs and develops missile batteries. Missile batteries provide the electrical energy for various onboard systems within a missile, including guidance systems, communication equipment and detonation mechanisms. They also export missile batteries to Israel and UAE.
Aircraft Batteries
Almost all batteries used by the Indian Airforce are supplied by HBL. A clearance certificate was also issued to the company for its product induction in PILATUS, P8-I, and V5 aircraft. FAA and EASA have certified HBL batteries stating that they are acceptable for Boeing 737 and Airbus 320 series aircraft.
KAVACH Train Collision Avoidance System (TCAS)
HBL made contracts with railways to supply TCAS. TCAS acts as an additional layer of safety by continuously monitoring the train’s location and surrounding environment. They utilize various sensors and communication technologies to detect potential hazards.
TMS (Train Management System)
A Train Management System is a master control center with a large display panel that displays the status of all trains inside its region. HBL is the only Indian company to get approved and certified for SIL – 2 by Bureau Veritas Spain.
Grenades with Electronic Fuzes
These are a type of grenade that utilizes electronic circuitry to detonate the explosive material. HBL is the only Indian company which supplies grenades with electronic fuzes which are being approved by the Ministry of Home Affairs for use by the paramilitary forces.
Submarine batteries
HBL and Exide industries supply batteries for submarines. HBL exports these batteries outside the country since there are only ten companies who make these batteries globally.
Electronic fuzes for Guns, Rockets and Bombs
HBL has developed 100% in house technology for developing fuzes and other ammunition which includes artillery guns as well.
HBL in Defense electronics
HBL manufactures Digital control harness and integrated platform management system and steering consoles for submarines. Since the market is not big HBL grabs the opportunity by being the only supplier.
Financials of HBL power systems
| FY 2023 | FY 2022 | FY 2021 | FY 2020 | |
|---|---|---|---|---|
| Revenue (in crores) | 1,349.75 | 1,221.50 | 908.95 | 1,077.09 |
| Net profit (in crores) | 95.54 | 89.4 | 14.58 | 24.07 |
| ROE | 10.45% | 10.74% | 2.30% | 2.68% |
| ROCE | 13.43% | 13.96% | 4.36% | 5.59% |
In the Financial year 2023, HBL power system saw a substantial increase in revenue by 10.5% to reach 1,349.75 crores as compared to 1,221.5 crores in FY 22. Analyzing three years, encompassing FY 2021 to FY 2023, the company displayed a good compound annual Growth Rate (CAGR) of 7.81% in revenue.
HBL power system in FY 23 also increased its net profit margin by 6.71% to 95.54 crores as opposed to 89.4 crores in FY 22.
This increase in revenue and net profit happened because of an increase in demand for the telecom sector and an increased focus on modernization in defence by the nation. The firm has also witnessed an highest-ever Nickel Cadmium Pocket Plate (NCPP) sales in FY23
In FY 23, HBL maintained favorable financial metrics with a Return on Equity (ROE) of 10.45% and a Return on Capital Employed (ROCE) of 13.43%
future plans Of HBL power systems
Capitalizing the growing sectors- Defence modernization
India’s increasing defence budget translates to potential opportunities for HBL’s electronics solutions like fuses and railway signaling systems.
The Indian government is pushing for self reliance in defence equipment. The policies like “Make in India”, incentivizes domestic companies to manufacture defence products within the company. HBL as an Indian company could benefit from these initiatives by securing contracts.
EV (Electric vehicle) Boom
The rising demand for EV’s creates a need for advanced battery technology. HBL is investing in a new facility to manufacture Lithium ion cells and electric drive trains (EDT) to cater this market.
HBL is actively developing and integrating Lithium ion batteries into their product portfolio and at the same time the company is also planning to expand its manufacturing unit.
The board of the company announced a sum of rupees 175 crores for its capital expenditure required during FY 25. Out of the 175 crores they allotted 60 crores for the lithium ion production plant.
Conclusion
HBL power systems have a strong foundation for future success. By focusing on innovation, optimising operations, and diversifying their customer base, they can solidify their leading position and contribute significantly to India’s technological development.
However, navigating competition and reducing the operating cycle will be crucial in their journey. What do you think about the performance of HBL in the future? Do share your thoughts in the comments below.
Written by Pavunkumar V M
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