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TITAGARH RAIL SYSTEMS LIMITED

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Titagarh Rail Systems Limited Q1FY27 Earnings Call Highlights

Financials

Business Background

Titagarh Rail Systems Limited is an integrated rail systems manufacturer with capabilities across Freight Rail Systems, Passenger Rail Systems, railway components and maritime systems. The company operates manufacturing facilities and engineering centres across India, including wagon and passenger rail facilities in Kolkata, Bharatpur and other locations, along with its Falta shipyard and the Ramkrishna Titagarh Rail Wheels JV in Chennai. Its portfolio includes freight wagons, metro coaches, Vande Bharat coaches, propulsion systems, traction motors and specialised rail products. Titagarh is also expanding into forged wheels, shipbuilding and maritime systems through strategic subsidiaries and joint ventures with partners including Ramkrishna Forgings and BHEL.


Q&A

Q1: Can you provide an overview of the revenue performance for the Passenger Rail System (PRS) vertical this quarter?

A: The first quarter of FY27 marked a historic milestone for the company, as the PRS vertical contributed its highest-ever share of revenue at 31%. Over 30 coaches were dispatched during the quarter, representing a 400% increase year-on-year and a 43% increase quarter-on-quarter.


Q2: What is the current status of the company’s total order book?

A: The total order book stands at ₹26,635 crores, which includes the company’s share of Joint Venture (JV) orders. On a standalone basis, the TRSL order book is ₹13,335 crores, with Passenger Rail Systems accounting for ₹10,395 crores and Freight Systems accounting for ₹2,470 crores.


Q3: Why have wagon dispatches been relatively muted this quarter, and what is the production strategy going forward?

A: Wagon dispatches were 1,284 units, a conscious call as the company awaits a larger tender from Indian Railways. Management has decided to downscale operations to 600–650 wagons per month to keep overhead absorption balanced until there is more clarity on the next major freight wagon tender.


Q4: Is there any update on the anticipated large wagon tender from the Indian Railways?

A: While the tender has been delayed due to external factors like the Middle Eastern war shifting government priorities, management remains optimistic. They noted that the Indian Railways' target to reach three billion tons of freight movement (up from the current 1.5 billion) makes the procurement of new wagons an "absolute arithmetic necessity" that can be deferred but not dropped.


Q5: What are the long-term production capacity targets for the Passenger Rail segment?

A: The company aims to increase production to 45–50 coaches per quarter this financial year. By FY28–29, the goal is to establish a total production capacity of 850+ coaches per annum, which translates to a potential revenue of approximately ₹8,500 crores.


Q6: What is the execution timeline for the current Bangalore and Gujarat metro projects?

A: Management expects to complete the bulk of the Bangalore and Gujarat (Ahmedabad and Surat) metro orders within this financial year, with some potential spillover into the first quarter of the next financial year.


Q7: When can we expect the prototypes for the Mumbai Metro and Vande Bharat projects?

A: The prototype for the Mumbai Metro is expected in Q4 of this financial year. Similarly, the Vande Bharat prototype is targeted for delivery between the end of the third quarter and the beginning of the fourth quarter of this calendar year.


Q8: How is the company progressing with backward integration for propulsion systems?

A: The transition is on track; the company has already supplied two rakes of propulsion equipment for EMUs and plans to supply propulsion sets for MEMUs by the end of this quarter or the beginning of the next.


Q9: What makes the Pune Metro order significant for the company’s manufacturing capabilities?

A: The Pune Metro order involves aluminium coaches. Titagarh is investing in a facility to become fully self-sufficient—from extrusion to final assembly—eliminating the need to import sub-assemblies from Italy. This establishes a manufacturing line for future high-speed projects like the Bullet Train, which also requires aluminium coaches.


Q10: Does the cancellation of the MRVC tender by Indian Railways pose a risk to your total addressable market?

A: Management does not see this as a setback. They believe that if railway production units (like ICF) become busy with specific local train projects, it creates more opportunities for the private sector to bid for other products like Vande Bharat trains, as the total system requirement remains unchanged.


Q11: How will the revenue from the Vande Bharat consortium with BHEL be accounted for?

A: For the supply portion, revenue will be added directly to the top line and flow down to the bottom line because it is a consortium. However, the AMC (Annual Maintenance Contract) portion is structured as a JV, and the company will recognize its share of profits from that JV.


Q12: What is the current status of the shipbuilding business?

A: Shipbuilding has been moved to a wholly-owned subsidiary, Titagarh Naval Systems. A new shipyard is being developed in Patalganga, led by a former CMD of Hindustan Shipyard, and is expected to be fully operational by Q1 or Q2 of the next financial year.


Q13: Can you provide an update on the Wheelset JV with Ramkrishna Forgings?

A: Hot trials are currently ongoing at the forging line in Chennai. Sample production is scheduled to start in August, and the project remains on track for its phase 2 timeline. Management expects profitability to be in line with standard forging business margins.


Q14: What is the visibility for metro orders beyond FY28?

A: Management is confident in a buoyant market, citing government plans to expand metro networks from 25 to 50 cities. They believe the shift toward urban mass transit and the National Rail Plan will ensure a steady demand for both mainland and metro coaches for years to come.



Strategic Outlook

  1. Management remains focused on scaling Passenger Rail Systems, supported by a ~₹16,365 cr identified pipeline across western, southern, central and northern India, covering major metro and regional rapid transit projects.
  2. The company is augmenting manufacturing capacity to meet growing passenger rail demand and intends to establish capabilities for high-speed trains, providing an additional long-term growth opportunity beyond metro and Vande Bharat projects.
  3. Freight Rail Systems is expected to benefit from the execution of its ~5,300-wagon order book during FY27, while additional railway tenders could further increase the company’s production run-rate.
  4. The Falta shipyard expansion is expected to strengthen Titagarh’s presence in maritime and defence opportunities, with the company targeting vessels up to 120 metres and opportunities from ONGC, IWAI, Indian Navy, Coast Guard and Sagarmala.
  5. The forged wheel JV is progressing as planned, with machining and testing-line commissioning underway and hot trials ongoing in the forging line, supporting the company’s objective of building domestic wheel manufacturing capabilities.
  6. The proposed BHEL JV for Vande Bharat Sleeper trains will manufacture and maintain the trainsets, with the consortium responsible for maintenance of 80 trainsets for 35 years, providing a long-term recurring opportunity.


Business Strategy

  1. The company is strengthening its Passenger Rail Systems business by expanding production capacity to address robust demand for metro and Vande Bharat coaches, while preparing to enter the high-speed train segment over the next few years.
  2. Titagarh continues to scale its Freight Rail Systems business, with a focus on Indian Railways and private customers. The company expects its monthly production run-rate to reach 1,000 wagons once new railway tenders are awarded.
  3. The company is diversifying beyond freight and passenger rail into shipbuilding and maritime systems through Titagarh Naval Systems, targeting small vessels, passenger ferries, e-tugs, hovercraft and defence-related opportunities.
  4. Titagarh is building capabilities in critical railway components through its 49% JV with Ramkrishna Forgings for forged wheels, with the planned facility targeting annual production of 228,000 wheels.
  5. The company is leveraging strategic partnerships with BHEL and other technology partners to strengthen its capabilities across rolling stock manufacturing, maintenance and emerging rail technologies.
  6. Titagarh is also pursuing indigenous technology development through its strategic collaboration with TuTr Hyperloop, with the objective of advancing Hyperloop-based freight mobility solutions for India.


Key Highlights

  1. Revenue from operations stood at ₹765.07 crs in Q1FY27, up 12.63% YoY, while EBITDA increased to ₹94.30 crs from ₹64.07 crs, with EBITDA margin improving to 12.33% from 9.43% YoY.
  2. Passenger Rail Systems delivered its highest-ever quarterly revenue of ₹230 crs, registering 197% YoY growth, with 30 coaches dispatched during the quarter, up 400% YoY and 43% QoQ.
  3. Freight Rail Systems dispatched 1,284 wagons in Q1FY27 and contributed 68.74% of revenue. The company has an order book of 5,300 wagons, with the entire order book scheduled for delivery in FY27.
  4. The total standalone order book, including the wholly owned subsidiary, stood at ₹13,335 crs, while the total order book including the company’s proportionate share in JVs stood at ₹26,635 crs.
  5. Passenger Rail Systems has an order book of 491 metro coaches and 1,280 Vande Bharat coaches, along with 74 propulsion sets and 72 traction motors, providing strong revenue visibility over the medium term.
  6. Titagarh Naval Systems is progressing with a ₹600 crs brownfield shipyard expansion at Falta and has secured ₹169 crs under the Shipbuilding Financial Assistance Scheme, while the forged wheel JV is progressing towards commissioning.


Performance

Q1 FY27:

  1. Revenue from operations: ₹765.07 crs (↑12.63% YoY)
  2. EBITDA: ₹94.30 crs | EBITDA Margin: 12.33% (↑289 Bps)
  3. PAT: ₹52.80 crs | PAT Margin: 6.90% (↑1,022 Bps)



FY26:

  1. Revenue from operations: ₹3,185.82 crs
  2. EBITDA: ₹330.85 crs | EBITDA Margin: 10.39%
  3. PAT: ₹122.98 crs | PAT Margin: 3.86%


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