High Energy Batteries (India) Ltd Q2FY26 – The Defence Powerhouse That’s Quietly Electrocuting Competition With 17% ROE and Torpedo-Grade Margins
1. At a Glance
When your batteries can start a Sukhoi and power an Agni missile, you’ve officially entered the “Don’t mess with me” league of manufacturers. High Energy Batteries (India) Ltd, or HEBIL for those who don’t like typing, isn’t your regular Eveready that makes AA cells for your remote. This ₹544 crore micro-cap crafts silver-zinc and silver-chloride magnesium batteries for India’s defence establishment.
Trading around ₹607 a share, HEBIL is no longer a sleepy PSU supplier — it’s an R&D-loaded, high-voltage powerhouse with 23% ROCE, 17% ROE, and a clean 0.22 debt-to-equity ratio. In the last 6 months, it’s sparked a 37% return, but recent quarters have been a little… let’s say, low voltage. Q2FY26 clocked ₹17.3 crore in revenue (up 15.7% YoY), and ₹2.01 crore in PAT (up 11.7% YoY). Not bad for a company where 96% of business still comes from military-grade silver-zinc batteries and the rest from nostalgia.
Is this a hidden gem or just a glorified DRDO lab in disguise? Strap in. Let’s deep dive.
2. Introduction
Defence suppliers are usually quiet — partly because NDAs exist, and partly because their clients have submarines. High Energy Batteries, incorporated in 1979, is one of those silent engineers behind India’s strategic defence power grid.
The company builds batteries not for your flashlight but for India’s underwater torpedoes, missiles, and aircraft — literally systems where failure means headlines. When the rest of India was discovering Paytm, this company was already supplying energy systems for Sukhoi and Mirage fighters.
Despite its vintage, HEBIL has been living a surprisingly modern life. With exports kicking off to countries like Malaysia, Algeria, and Kyrgyzstan, and a confirmed order book of ₹62.7 crore plus ₹101 crore probable, it’s gearing up (pun intended) for a 12–18 month power surge.
Yet, behind the drama, there’s one undeniable truth: defence suppliers run on government funding, not retail FOMO. And in India, “timely payments” from the government is still considered fiction.
But hey, who doesn’t like a good patriotic cashflow story?
3. Business Model – WTF Do They Even Do?
Let’s decode this slow-burn thriller.
High Energy Batteries manufactures — you guessed it — high-energy batteries. But these aren’t your laptop cells. They’re military-grade, built to survive underwater pressure, missile launches, and government procurement red tape.
Their product bouquet includes:
Aircraft Batteries – Made in collaboration with Yardney Electric (USA), used in Indian Air Force aircraft like Mirage, Sukhoi, and Mi-series helicopters.
Torpedo Batteries – Developed with DRDO for underwater propulsion systems.
Missile Batteries – Built for the Agni and Prithvi series under DRDL programs.
R&D is their real asset — they’re developing silver-zinc and silver-chloride magnesium batteries for new torpedo generations, plus something called “one-shot batteries” (think: single-use batteries for high-intensity naval operations).
They’re now dipping toes into futuristic tech: fuel cells and vanadium redox flow batteries (VRFB) — the holy grail for renewable energy storage.
Basically, HEBIL is that nerdy engineer from your college batch who never attended fest nights, but 20 years later, builds tech that powers a submarine.
4. Financials Overview
Source table
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
₹17.3 Cr
₹14.95 Cr
₹13.27 Cr
15.7%
30.4%
EBITDA
₹2.64 Cr
₹1.64 Cr
₹0.74 Cr
60.9%
256%
PAT
₹2.01 Cr
₹1.80 Cr
₹0.78 Cr
11.7%
157%
EPS (₹)
2.24
2.01
0.87
11.7%
157%
Annualized EPS = ₹2.24 × 4 = ₹8.96 → P/E = 607 / 8.96 = ~67.7x. (P/E not for the faint-hearted.)
Commentary: If the P/E were a temperature, this stock would melt its own batteries. Still, high R&D, monopoly niche, and DRDO connections justify a “strategic premium.” Profit consistency exists, but volumes fluctuate — typical of defence orders that come in chunks, not streams.
5. Valuation Discussion – Fair Value Range Only
Let’s break it like auditors after lunch:
a) P/E Method: Industry P/E = 31.4x Company EPS (FY25) = ₹15 → Fair Value Range: ₹471 – ₹525
b) EV/EBITDA Method: EV/EBITDA (industry median) = 20x HEBIL EBITDA (FY25) = ₹19 Cr → EV = ₹380 Cr → Per share ~₹420
c) DCF Estimate (assuming 8% growth, 12% discount, terminal 3%): → Implied Range ₹440 – ₹500
🎯 Fair Value Range (Educational): ₹420 – ₹525
(This range is for educational purposes only and not investment advice. Please don’t sell your house for batteries.)
6. What’s Cooking – News, Triggers, Drama
There’s no shortage of voltage in HEBIL’s newsroom lately.
Order Book Voltage: ₹62.7 crore confirmed + ₹101 crore potential in 6 months — enough to keep factories buzzing for 18 months.
Exports Launched: For the first time, HEBIL shipped to Malaysia, Algeria, and Kyrgyzstan — finally someone outside South Block noticed.
DRDO R&D Push: Next-gen Silver-Zinc and Silver-Chloride batteries for torpedoes — expected to go commercial FY26.
Fuel Cell & VRFB: The company’s foray into vanadium redox batteries could mark its civilian comeback — think renewable grid storage instead of missile silos.
But here’s the spicy bit — the lead-acid battery unit (the old breadwinner) has been suspended since 2019. That’s like closing your kirana store to start building jet engines. Brave, but bold.
