Rs 3,346.35 crore order book: Railway Kavach Stock Hit Upper Circuit After Entering JV with Venkata Rami Reddy Constructions (VRRC)

On Thursday, shares of Kernex Microsystems (India) Ltd hit a 5 per cent upper circuit to Rs 1,129.80 per share from its previous closing of Rs 1,076 per share. The stock’s 52-week high is Rs 1,584 while its 52-week low is Rs 625.55. The shares of the company saw a spurt in volume by more than 2.6 times on the BSE.

Kernex Microsystems (India) Limited has formed a Joint Venture with Venkata Rami Reddy Constructions (VRRC) to upgrade the Kavach Version 3.2 to 4.0 system on a section of the South Central Railway from Sadashivpet Road to Parli Vaijnath Parbhani. Under the agreement, Kernex Microsystems will hold an 80 per cent stake, while VRRC will have 20 per cent, though this ratio may be adjusted for future projects. This collaboration is set to facilitate the execution of additional projects that are awarded to the joint venture.

Earlier, the company has received a contract by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) for the implementation of the KAVACH (Train Collision Avoidance System). The project, valued at Rs 209.82 crore (including GST), covers approximately 931 km of the Eastern Dedicated Freight Corridor and includes the survey, design, supply, installation, testing, and commissioning of the system, along with associated works. The project is expected to be completed within 730 days from the date the Letter of Acceptance (LoA) was issued.

About the Company

Kernex Microsystems (India) Ltd, established in 1991, is a leading provider of safety systems and software services for the railway industry. The company, an ISO 9001:2015 certified export-oriented unit, specialises in delivering turnkey electronic systems and technical support. Their product and service offerings encompass a wide range of solutions, including anti-collision devices, train collision avoidance systems, automatic level crossing gates, signalling systems, headway improvement technologies, and water management solutions. Kernex Microsystems leverages its expertise in wireless front-end, satellite communication, embedded systems, signal processing, network management, and software development to provide innovative and reliable solutions to the railway industry.

In its Quarterly Results, the net sales increased by 95 per cent to Rs 55.93 crore and net profit increased by 108 per cent to Rs 7.41 crore in Q1FY26 compared to Q1FY25. In its annual results, the net sales increased by 850 per cent to Rs 190 crore in FY25 compared to FY24. The company reported a turnaround net profit of Rs 50 crore in FY25 compared to a net loss of Rs 27 crore in FY24, an increase of 285 per cent.

The company has a market cap of over Rs 1,800 crore and its order book as of August 29, 2025, stands at Rs 3,349.95 crore. According to the shareholding of the company, the promoters own 28.97 per cent stake, FIIs own 0.52 per cent stake, DIIs own 1.11 per cent stake, the Government own 0.06 per cent stake and the rest of the stake is owned by the public i.e., 69.34 per cent. The stock is up by 80 per cent from its 52-week low of Rs 625.55 per share and has given multibagger returns of 5,700 per cent in 5 years. 

Disclaimer: The article is for informational purposes only and not investment advice.