CLSA Picks 3 Stocks That Could Benefit From Vande Bharat And Kavach Projects

Brokerage CLSA said Vande Bharat and Kavach are two key drivers for electronics companies supplying to the railway. Companies such as Amber, Kaynes and Syrma are expected to see order inflows from modernisation initiatives in these areas in railways, the brokerage said 

What Happened: The research firm said there is a large capex program laid out over the next five years. It believes the measures that would be taken in the railway sector will be categorised into capacity augmentation, safety enhancement, comfort of travel and ease of use. 

This provides large opportunity for electronics manufacturers geared towards Kavach and modernisation schemes, according to the brokerage. 

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Kavach is a technology developed by the Research Design and Standards Organisation (RDSO) in collaboration with three Indian firms. It is an automatic train protection (ATP) system which ensures safety of trains by controlling speeds, assists locomotive drivers to avoid missing danger signals. 

CLSA said companies such as Amber Enterprises, Kaynes Technology and Syrma SGS could see order inflows from these projects. 

Earlier in June, Indian Railways is inviting tenders for 10,000 kilometres of Kavach, worth around ₹5,000 crore. 

Price Action: Shares of these electronic companies were rising on Wednesday morning.

Shares of Amber Enterprises were up 1.58% to 4,115.50

Shares of Kaynes Technology India were up 1.33% to ₹4,083.75. 

Shares of Syrma SGS Technnology were up 0.80% to ₹495.25. 

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Posted In: EquitiesNewsMarketsMoversTrading IdeasAmber EnterprisesKaynes TechnologySyrma SGS Technology