Titagarh Rails Steams Ahead with ₹900 Crore Investment

Titagarh Rail Systems, India's leading wagon manufacturer, is set to invest nearly ₹900 crore over the next three to four years to strengthen its passenger and freight segments. Of this investment, about ₹800 crore will be dedicated to the high-margin passenger business, while around ₹80 crore will enhance the traditional freight business over the next two years.

Anil Agarwal, Deputy MD and CEO of Titagarh Rail Systems' Freight Rail System division, disclosed that the company has already invested ₹150-200 crore in the last two years to support the growing freight sector. Located near Kolkata, the company’s Titagarh facility expanded its capacity from 700 to over 900 wagons per month by the end of FY24, with plans to reach 1,000 wagons per month in the next two to three years.

“Our current pace suggests we will achieve 1,000 wagons per month by the end of this fiscal year and maintain this rate for the next few years,” said Agarwal. The freight vertical aims to generate ₹4,500-5,000 crore in revenue this year, up from last year’s ₹3,200 crore. EBITDA is expected to improve by 100-200 basis points, reaching 12-12.5 percent.

Titagarh Rail Systems, reporting a consolidated turnover of ₹3,900 crore and a profit of ₹289 crore in FY24, is also increasing capacities in the passenger coach vertical to 850 annually, with each coach priced at around ₹10 crore. This segment promises higher margins and could generate ₹8,000-8,500 crore as capacities ramp up.

As the passenger coach vertical grows, the company anticipates a balanced turnover mix between passenger and freight businesses. The first coaches for Bengaluru metro’s yellow line are expected to be delivered in August 2024. The order book stood at 22,000 wagons, valued at ₹7,800-8,000 crore, as of April 1, marking the start of this fiscal year.

News by Rahul Yelligetti