HBL Power: Annual Report Summary 2023
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About the Company and its Business Segments:
HBL Power Systems is a technology-driven engineering enterprise that develops niche solutions for demanding applications.
Business Highlights FY2022-23:
Industrial Batteries
Witnessed strong demand from the telecom sector due to 5G Rollouts.
Executed large orders for the supply of 12V-VRLA batteries for Wi-Fi electrification projects as a part of the Bharat Net project.
Bagged single largest order of 31 crs for Ni-Cd batteries for IGGL (Indradhanush Gas Grid Limited) pipeline project in Northeast.
Bagged export orders for supplies to New York City Transit (NYCT) & Siemens Via Rail, Canada.
Defence
Completed type approval process for Type-II batteries meant for use in HDW German (Shishumar) class submarines, and secured manufacturing clearance.
Developed and supplied thermal batteries to the Advanced Systems Lab (ASL) of DRDO, for Agni Prime Strategic Missile and received a production order.
Electronics
Won four contracts for deployment of Kavach TCAS in Delhi-Howrah and Delhi-Mumbai routes worth 807 crore.
Won a contract for the supply of 46 Kavach TCAS systems to Integral Coach Factory, to be installed in 23 Vande Bharat trainsets.
Completed deployment of Kavach TCAS in Milestone I of Eastern Railway, West Central Railway and Western Railway.
Deployment of Train Management System (TMS) in progress in Sealdah Division of Eastern Railway.
Type testing and field trial of Electronic Interlocking System in progress
Medium-Term opportunities:
Batteries Segment
The Indian Lead acid battery is expected to register a CAGR of more than 9% during 2023-28. COVID-19 moderately impacted the market size in 2020, and currently, the market has reached pre-pandemic levels.
Estimates suggest that telecom players will add 4.5 lakh towers to improve latency and quality 5G coverage. 5G consumes more power than 4G. Hence, the connected battery capacity will be higher for a given backup requirement. Moreover, the replacement opportunity is also expected to be promising.
The UPS battery market is enormous (3000+ crore) and is growing consistently. These realities should sustain the demand for lead-acid batteries.
India is a data-guzzling market and the world’s largest consumer of data. This data needs to be stored in India. As a result, India will add a data centre capacity of over 4000 MW in the next five to six years. The company’s PLT batteries are gaining attention from Data Centre consultants and entities, aided by their performance, total cost of ownership, and safety over conventional VRLA and lithium options.
The management believes that the demand for Nickel Cadmium Pocket Plate (NCPP) will remain robust over the next couple of years.
Defence
The company has partnered with HAL Kanpur to develop batteries for civil aircraft Hindustan D0-228 and with HAL, Bangalore for Light Compact Aircraft - Tejas, and Advanced Light Helicopters, as part of the Atmanirbhar Bharat and Make in India initiatives.
They are working with the Ministry of Aviation and the Director General of Civil Aviation (DGCA) to deploy NCSP batteries in all civil aircraft flying in India under the Atmanirbhar Bharat initiatives.
They are engaging with defence authorities in other nations with Russian-made aircraft and helicopters to promote their batteries.
Having successfully developed batteries for Light Weight (LW) and Heavy Weight (HW) torpedoes, they embarked on creating new variants to expand the market.
Electronics
In the Union Budget 2023-24, an allocation of 2.40 lakh crore has been provided to the railway sector for accelerating the growth of the Indian Railways by improving infrastructure and introducing high-speed trains, which would call for increased TCAS deployment.
Considering these factors, Kavach TCAS garners the greatest attention in the directional focus for FY24. So far, 20 Kavach systems have been delivered, and eight have been installed in 4 Vande Bharat train sets.
The company will focus on getting its Train Management System (TMS) certified to Safety Integrity Level II, according to CENELEC standards. Following this certification, the deployment in the Eastern Dedicated Freight Corridor will be commercially operational.
Business Model:
Enter only Niche markets, which are (at that time) too small for big companies and too difficult for small companies.
Avoid capital-intensive products and B2C businesses. Search for Engineering Intensive businesses to invest in.
Technology should be the basis of sustained competitive advantage; avoid products where technology is easily available.
Develop the technology needed, appropriate to the size of the Indian market, by R&D in-house.
The goal is to be #1 or #2 in a market of reasonable size, or #3 in a large market. If this is not possible, do not enter, or exit.
This business model has proved to be successful; HBL’s market position in India is #1 or #2 in all its products, except telecom tower batteries where it initially was #2, then #1, and currently #3.
Railway Signalling Electronics
TMS
One of the biggest issues in the operation of trains on the Indian Railways network is congestion on the available track infrastructure. Legacy systems for signalling and operations management are not able to keep pace with the need for running more trains. This, together with delays in the running of trains, affects the country’s economic progress.
Addressing this problem has become a compelling need for Indian Railways. HBL’s Train Management System (TMS), together with automatic signalling, addresses this problem.
A TMS is a central control centre, from where the operations of running trains in a large section of the railway network can be controlled centrally, avoiding delays in signalling. TMS, with its centralised traffic control capability and faster emergency response time, increases track capacity utilization.
The Company had deployed this solution in the Eastern Dedicated Freight Corridor. TMS installation in the Sealdah Division of Eastern Railway is in progress and will be completed in the current year
Defence Electronics- Electronics Fuzes for ammunition
Electronic Fuzes are essential for reliability and safety. HBL is the only Indian supplier for the Electronic Fuzes, and can also supply to other firms making the rest of the grenades.
Grenade fuzes made by HBL have been approved by the Ministry of Home Affairs for use by the paramilitary forces under a “Development cum Production Partner” contract with ARDE/ DRDO. Sales to MHA are expected to begin in FY24.
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