Multibagger stock Kernex Microsystems hits 5% upper circuit on ₹2,041 crore order win
Multibagger stock Kernex Microsystems' share price hit the 5% upper circuit limit at ₹1,140 after securing a ₹2,041 crore order from Chittaranjan Locomotive Works for KAVACH equipment. The stock has surged 200% in six months and 4,175% in the last four years.
Stock Market Today: Kernex Microsystems share price was locked in the 5% upper circuit limit at ₹1,140 per share in the early morning trade on Monday, December 9, following the announcement of a significant order win.
In an exchange filing on Friday, the company informed investors that it had secured an order from Chittaranjan Locomotive Works for the supply, installation, testing, and commissioning of 2,500 sets of onboard KAVACH equipment. The project, valued at ₹2,041 crore, is expected to be completed by the end of 2025.
Kernex Microsystems is engaged in the manufacturing and sale of safety systems and anti-collision devices for railways, along with software services. The company started developing railway safety systems in 1999 and successfully developed and demonstrated a prototype of ACDs to Konkan Railway Corporation Limited and members of the Railway Safety Board, as per the company's website.
With the Government of India's thrust now on modernising railways with large infrastructure spending and rail safety, the company is in a strong position to benefit from this move. The government has prioritised transforming Indian Railways into a world-class entity.
For the year 2024-25, a record capital expenditure (Capex) of ₹2,62,200 crore has been allocated to the Railways. The Gross Budgetary Support for the same period is set at ₹2,52,200 crore, a significant increase from ₹2,40,200 crore in 2023-24 and a substantial rise from ₹28,174 crore in 2013-14. The higher budget allocation was also driven by a focus on boosting safety measures.
One of the key safety measures is Kavach, an indigenously developed Automatic Train Protection (ATP) system. Kavach assists loco pilots by automatically applying brakes if the pilot fails to do so, ensuring safe operation during adverse weather conditions.
Adopted as the National ATP system in July 2020, Kavach has been deployed over a 1,465 km route and on 144 locomotives, including Electric Multiple Unit (EMU) rakes, on the South-Central Railway.
The latest Kavach 4.0 specification was approved by the Research Designs and Standards Organisation (RDSO) on July 16, 2024. As of July 24, 2024, ₹1,216.77 crore had been spent on Kavach, with an additional ₹1,112.57 crore allocated for 2024-25, according to recent reports.
Stock up 200% in less than 6 months
The company’s shares have surged by 200% in less than six months, maintaining a strong upward trend. The stock has risen from ₹397 per share at the beginning of July to its current trading price of ₹1,197 per share.
Over the last four years, the stock has delivered an impressive return of 4,175%, reflecting substantial growth for shareholders during this period.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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