The shares of this small cap stock engaged in the business of manufacture and distribution of Safety Systems and Software services for Railways, came into focus upon bagging an order worth Rs 325 crores from South Eastern Railway.
Stock Performance
With a market capitalization of Rs 1,436.03 crore, Kernex Microsystems (India) Ltd rose over 4 percent on Friday’s trading session and made an intraday high of Rs 889.70 per share compared to its previous closing price of Rs 852.50 per share. The stock retraced from its day’s high and was trading at Rs 856.85, a slight increase compared to the previous closing price.
What Happened
In an exchange filing, Kernex Microsystems announced that its consortium KERNEX-MRT has received an order from South Eastern Railway for the Supply, Installation, Testing, & Commissioning of Kavach on GD & GQ routes (688RKM) for a broad consideration of Rs 325 crore.
It also involves associated works on the section of Kharagpur & Chakradharpur division of South Eastern Railway. The contract is to be executed within 1,000 days from the date of appointment.
Company Overview
Kernex Microsystems (India) Limited specializes in manufacturing and selling safety systems and software solutions for railways. The company also offers embedded research and development (R&D) services, as well as electronics manufacturing services. Additionally, it provides turnkey product development, electronic product design, embedded software design, electronic manufacturing, ESS testing, offshore development, and quality control solutions.
Financial Performance
In the latest quarter, Kernex Microsystems reported a massive 311 percent YoY increase in its total revenue from Rs 9 crore to Rs 37 crore. On a quarterly basis however, there was a 10 percent decline from Rs 41 crore in Q2 FY25.
The net profits stood at Rs 7 crore as compared to a loss of Rs 9 crores in the same quarter previous year. This was accompanied by a 4 percent QoQ increase in net profits from Rs 6.8 crore in Q2 FY25.
Industry Outlook
Over the next five years, the Indian railway market is projected to become the third largest globally, contributing 10 percent to the global market. To attract private investment, the government has launched two key initiatives: allowing private operators to run passenger trains across the network and redeveloping railway stations nationwide. According to Indian Railways, these projects could bring in over USD 7.5 billion in investment within five years.
Additionally, 3,000 new trains are planned to be introduced over the next four to five years, aiming to boost passenger capacity from 800 crore to 1,000 crore, addressing the growing population’s transportation needs.
Written by Shwetha Sairam
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