HBL power

Annual report 2023 summary

INDIA’S LEADING RESEARCH-BASED ENGINEERING COMPANY THAT AIMS TO FILL TECHNOLOGY GAPS IN INDIA BY DEVELOPING AND MANUFACTURING COMPLEX PRODUCTS AND SOLUTIONS DEMANDED IN INDIA TODAY

Brief summary:

• HBL power is mainly into manufacturing of batteries and electronics
• Exports contributed to 15.44% of the revenue.
• 5 subsidiary companies — HBL Germany GMBH,SCIL Infracon Private Limited ,HBL America Inc,Torquedrive Technologies Private Limited and HBL Tonbo Private Limited *, 1 JV Gulf Batteries Company Limited and 1 associate Naval Systems & Technologies Private Limited
• HBL has 7 manufacturing plants all situated in India and has 1720 total employees. Employee attrition rate was 15.6%.

Battery division : 70% of revenues

1. -Industrial Batteries
   1.1 Lead acid battery —39.7% of the reveneue.
   -Finds application in Telecom, UPS, railways and expected to grow at CAGR of 9%.
   -Capacity addition of 4.5 lac towers to support 5G.
   -HBL power sees good replacement opportunity and also expects battery size to grow since 5G consumes more battery than 4G.
   -UPS is relatively a smaller market ~3000 cr.
   1.2 Nickel cadmium —12% of the revenue.
   -Highest ever sale in FY23.30% YoY growth.
   -Strong demand observed from railways, oil and gas.
   -Won single largest order from IGGL (Indradhanush Gas Grid Limited).
   -Supplied Nickel, Cadmium fiber plate to US and Canada.
   -Healthy demand also expected from Flue Gas Desulphurisation (FGD).
   -Deadline extended to 2025 for all power plants to have FGD installed.
   1.3 Pure Lead Thin Plate Batteries (PLT) :
   -Finds application in data centers. It completed 84 MW of installations during the year.
   -Recently, the Company concluded a rate contract with a large data center entity to supply PLT batteries over the next 30 months.
   Received approval from Indian army and DRDL. Data centers to double by 2025 and another 4000MW in next 5 to 6 years.
2. Defence/Aviation batteries
   2.1 Nickel cadmium sintered plate:
   -Finds application in Military & Civil aircraft and helicopters and Unmanned Aerial Vehicles (UAVs).
   -The Company continued to export batteries to Bombardier for use in Global 7500 aircraft and to Israel Aerospace Industries (IAI) for use in UAVs
   2.2 Silver batteries: Used in Navy.
   -The Company’s efforts in developing batteries for Light Weight and Heavy Weight torpedo applications moved closer to completion.
   2.3 Thermal batteries: Lithium based used in explosive application
   2.4 Submarine batteries:
   -Expect to supply Type-II batteries for HDW German (Shishumar) class submarines in the current year. Engaging with ELBI and IAI of Israel to supply various batteries.
3. Electronics:
   3.1 TCAS:
   -Development of Kavach began in 2007, demonstrated in 2012 and became a commercial success in 2022.
   -Won 4 kavach orders worth 807 cr between Delhi-howrah, Delhi-Mumbai route.
   -Won order to install 46 kavach sets in 23 Vande trains. Order completion in 18–24 months.
   -Union Budget 2022–23 has earmarked funds for speedy implementation of the Kavach System on a 2,000 km track and sanctioned implementation on 34,000 track of Golden Diagonal & Golden Quadrilateral rail route, which will be accomplished by 2027–28
   3.2 TMS:
   -Facilitates better train management and seamless train movement.
   -HBL is the only approved and proven Indian Company for TMS.
   -HBL will focus on getting Train Management System (TMS) certified to Safety Integrity Level II, according to CENELEC standards
   3.3 Defence Electronics:
   -Grenades fuzes made by HBL have been approved by the Ministry of Home Affairs.
   -Approval of the Army for their needs of Grenades is expected during FY 24
4. Electric drive train — Undertook road trials of Electric drive train on 7.5T truck

Opportunities:

Source : HBL annual report

Product launch strategy:

1.Enter niche market
2.Avoid capital intensive business
3.Be a #1 or #2 player in the market or #3 if the size is large
4.Avoid products where technology is replicable

Quality and certifications:

• FAA (Federal Aviation Administration), USA-approved supplier of onboard nickel-cadmium batteries for Boeing aircraft. We are also an approved OEM supplier of comparable batteries for the aircraft manufactured by IAI (Israel Aerospace Industries), and Bombardier.
• Substantial global approvals including ISO 9001–2015, ISO14001–2015, ISO 45001–2018, and ISO 22163–2017 — IRIS- Rev 3 (Railway business) and AS 9100D (Aviation, Space and defense)
• HBL was the first company in India to receive the coveted IRIS conformity assessment certification in 2009. HBL is also the first company in India to be endowed with the esteemed Silver level certification (upgraded from the previous Bronze level) from International Railway Industry Standard (IRIS).

Others:

Promoter salary:

KMP salary:

• Security deposits with govt and others has gone up from 8.4 cr to 11.44 cr
• Advances to vendors have gone up 2x from 20 cr to 52cr
• Provision for warranties has jumped to 12.42 cr from 4.73 cr
• Employee costs under R&D went up from 0.54 to 3.65 cr.
• % of recycling went up last year.

• Total energy consumed from renewable sources(biomass) went up from 5.24TJ to 12.74TJ