Ladies and gentlemen, good day and welcome to the Q4 and FY 2025 earnings conference call of Titagarh Rail Systems Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference call is recorded. I now hand the conference over to Ms. Prachi Ambre from MUFG Investor Relations. Thank you, and over to you, ma'am.
Thank you, Pooja. On behalf of Titagarh Rail Systems Limited, I extend a very warm welcome to all the participants on Q4 and FY 2025 financial results discussion call. Today on the call, we have Mr. Umesh Chowdhary, Vice Chairman and Managing Director. Mr. Anil Agarwal, Deputy Managing Director. Mr. Prithish Chowdhary, Deputy Managing Director. and Mr. Saurabh Dhanuka, Chief Financial Officer. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs, expectations, and opinions as of today. These uncertainties are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Umesh sir for his opening remarks. Over to you, sir. Thank you.
Thank you, Prachi. A very good afternoon to everybody, and thank you very much for joining this Q4, FY 2025, and FY 2025 earnings call of Titagarh Rail Systems. It is always indeed a pleasure joining this call to share the updates and to get feedback from the investors of the company. The year gone by has been pretty much as expected in terms of the freight rail system of the company, although it was the target of the company to stabilize at about 950-1000 wagons per month. But unfortunately, due to the shortage of wheelsets in the last two quarters, the last two quarters were impacted, and as a result of which, we could not achieve exactly the number of wagons that we were wanting to.
Just to bring everybody up to speed, in the Railway Board contract that we get, the wheelsets have to be essentially procured from Rail Wheel Factory, Bangalore, and they had some problems in terms of access and output of wheels. So right from the Q3 of FY 2025, there has been a shortage of wheels that has been plaguing the industry. We understand that from the month of June, that is the current month, the production of Rail Wheel Factory will get normalized, and going forward, this problem should not be existing. However, we are happy to report that FY 2025 has been the highest-ever production of wagons that our company has seen, or the industry in general has seen in India.
We have produced in FY 2025, 9,431 wagons, which, to the best of my knowledge, is the highest produced by any company in a single year in the country ever, which in itself is a record. In terms of the order book, we have an order book which is at a targeted production we'll see us through for this current financial year, and we expect that by the end of the year, the new tenders should come up and will give us visibility for the coming years as well. In terms of the FRS, the Freight Rail Systems, just to conclude on the other updates, for the foundry side, which is a very important part of backward integration and ensuring that the costs are kept under control, the company has taken up measures to enhance the self-reliance of the entire foundry capacity.
As a result of this, we have, again, in the foundry, achieved record productions. I believe that the production numbers have not been disclosed, so we will first update them in the. Sorry, the production numbers have been disclosed. We have produced 27,240 metric tons in the foundry this year, and this in itself is a record production ever for the company. Going forward, in FY 2026, we would have completed the expansion of the foundry. We are installing completely modern foundry production facilities in both our foundries, and this will enhance our production to a substantially higher number. We are targeting, in the first phase, to get to around 40,000 tons of castings, which we are confident of being able to achieve on a monthly runway basis within the current financial year.
As far as the Passenger Rail Systems is concerned, once again, there were initial teething troubles that we faced, as we had reported in the past, in the setting up of the plant due to initially the Chinese visa problems because a lot of technology transfer as well as equipment were coming in from China, as well as the Bangalore Metro is a project that we are working and executing with CRRC. The project kickoff was delayed. However, the first train for this project was dispatched in December, January 2025. In January 2025, so that is in the quarter, and thereafter, we have dispatched another train, and now the production for the car body and the assembly has started picking up.
The supply chain problems that were also existing for materials to come in from China have gotten resolved, and now we expect that the production for the Bangalore Metro within this quarter should get reasonably well streamlined, and from Q2 of FY2026, it will be fully streamlined. We have started the car body production for the Gujarat Metro, specifically for the Ahmedabad Metro, as well as for the Vande Bharat in the last couple of months. The Gujarat Metro was started in March, and the Vande Bharat has started in April of 2025. We are expecting the first train of Gujarat Metro, that is Ahmedabad Metro, to be done in Q2 of the current financial year, and the Vande Bharat is expected in the end of Q4 or beginning of Q1 of the next financial year.
The other great development that we've had is the propulsion division of the business has picked up. During the year, we have supplied 636 traction motors as a part of the propulsion and electrical sub-business unit of the PRS. This being a new division, to have reached a run rate of 636 in the first year is quite satisfying. We are now targeting to ramp this up to between 125- 150 traction motors per month, so that is 1,500- 1,800 traction motors per month from this financial year itself. As far as the propulsion is concerned, the prototype set of the EMU propulsion is now ready. It is under the final testing and approval of RDSO.
We are expecting and are confident that the first set of propulsion, which is the EMU propulsion, will be supplied within Q1 of this financial year, or the beginning of Q2 of the financial year. This is, in a nutshell, the business of the PRS. We are quite hopeful and confident that we will be able to achieve the run rate of between 20- 25 cars a month within the financial year, and all the facilities are set up. Once the Vande Bharat production also comes in stream, we will be able to enhance this to double of that, which we expect to be able to do in FY 2027, where our target would be to get to a run rate of between 40- 50 cars per month.
In terms of the order book pipeline or the tender pipeline in the metro segment, there are a number of tenders where the company has participated and a number of tenders that are expected to be floated. As a matter of policy, we are not speaking about specific tenders or opportunities till the results of those are finalized. During the year, the company has enhanced its activity in two new business areas. One is the SSS, which is the Safety and Signaling Systems. This business, while we have taken up as a SBU, is working more as a subset of the PRS as well, and we have already started participating in tenders where we have gotten qualified for certain safety and signaling systems.
And we are in the process of further entering into technology tie-ups and joint ventures to enhance our presence in the vast scope of business that exists in the safety and signaling system within the Railways and the metros. And the fourth business segment that we have re-embarked upon is the Shipbuilding and Maritime Systems, what we call SMS. As you would be aware, the company has been in the shipbuilding venture for a while and has very good credentials. As a company, we have delivered several marquee projects, including vessels for the National Institute of Ocean Technology. Some of these vessels had found its way into being one of the most coveted vessels, which were included in the Presidential Fleet Review, which is a very prestigious thing.
The company has also exported through GRSE vessels to Guyana under the Indo-Guyanese Friendship Schemes and has done many warships as in past patrol vessels for Indian Coast Guard, again along with GRSE. As we speak, the company is delivering several vessels to the Indian Navy, and considering the thought of the Indian government on attaining Atmanirbhar Bharat on the naval and the shipbuilding side, and the incentives and the focus given in this segment, as we had heard during the budget of the Honorable Finance Minister earlier this year, the company has re-embarked on this venture and has got the land in Palta, which is on the south side of the Howrah Bridge, which takes away the impediments that the company used to face in building more important or larger vessels as it did not have the air clearance owing to the Howrah Bridge.
The company is now in the process of revamping that facility or building upon that facility, and of course, as was announced a few quarters ago, the company has also constituted a board-level committee to define the strategy or the way forward for the Shipbuilding and Maritime Systems , whether it would be a part of the parent company or a subsidiary or a strategic joint venture, etc. We believe that within the next few months, we would be able to finalize and come back to the market as to what the final strategy, APEX plan, and the business plan for the Shipbuilding and Maritime Systems would be. This is, in a nutshell, the past year and the future year's outlook for the company, and with this, I would open up the floor to any questions or any suggestions that might be there. Thank you. Thank you very much.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Balas ubramanian from Arihant Capital. Please go ahead.
Good evening, sir. Thank you so much for the opportunities. So my first question regarding signaling systems or who are our global JV partner, and what are the timeline for projects and approval, and what kind of revenue visibilities we can expect over three to five years? This is my first question, sir.
Thank you. So this is a new business unit. It will definitely take some time.
We have started participating in some tenders. We have participated in a particular tender, the results of which is still awaited.
Hello? Yes, I hear you. Yeah.
As regard to joint venture partners is concerned, we have four different products that we are doing in this segment. We are in partnership or in dialogue in some cases with different partners. As was announced, we are working with a company called MERMEC in Italy for some of the products. There are other companies in different parts of the world for different products that we are working on. We will not announce any of these on a premature basis. As and when we are able to succeed in a particular venture, we will definitely come back and announce to the market both the exact specific opportunity which materializes along with the names and details of the strategic partner in that case.
As a matter of policy, we would like to be conservative in our approach, not to announce something before it is completely finalized.
Okay. Sir, on that traction motors side, I think our revenue is around INR 300 crore. I think the opportunity size is around INR 2,000 crore as per that percentage rank. What are the steps to tap the opportunity?
I missed your last part of the question, sir.
On the traction motors side, I think our top line is around INR 300 crore, and the opportunity size is mentioned around INR 2,000 crore kind of opportunity size. And how we are going to tap that opportunity? I think we are doing around 100 motors per month.
Yeah. I don't know where you get the revenue numbers from, but I will just give you about the opportunity. The opportunity indeed is quite large as far as how we are tapping the opportunity.
As I just mentioned, we have already gotten to a run rate of about 125 traction motors a month, so we are confident of being able to, from an average of 50 motors per month last year, we will be able to increase it to between 125- 150 motors a month this year. But that is only one part of the business segment of the Propulsion and Electrical. Apart from that, once our EMU and MEMU propulsion is approved by the railways, that in itself, we have an order book of close to INR 400 crore on that, and there are several tenders in the pipeline for that. So we believe that this business, we have been working on this for a while now, and we are fully ready to take off on this business.
Within the next maybe two years or so, we will be fully into this business, and this will be one of the main lines of business for us.
Okay. Sir, on that, wheelsets' plan earlier a year back is estimated around INR 1,300-1,400 crore. I think as per RK Forging's side, they have mentioned around INR 2,000 crore kind of CapEx is estimated. But the CapEx, sir, keeps increasing. They have some delays in that plan, and how do you see cost escalation side?
No, there is no CapEx delay. The earlier estimation that was given was a very basic estimate once the project report was finalized, including two phases of the project. The cost is what has been announced by RK Forging.
The project is going on pretty much on track and pretty much within the budget that was approved in the project report based on which the project has been taken up.
Okay. Sir, on the wheelset side, still we are facing issues. So when we can expect normalcy?
I'm sorry, I could not hear you again.
Sir, actually, the delay in wagon production is because of the wheelset's issues. When we can expect normalcy overall in the industry?
I already mentioned that in my opening comments, sir, that we understand from the month of June, the production of wheelset will become normalized.
Okay. Okay. Thank you. Thank you.
The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.
Hi. Good afternoon, sir, and thanks for taking my question. So my first question is on the wagon ordering side.
I mean, you mentioned that we expect a tender from Indian Railways maybe sometime towards the end of this year, but wanted to get your views on private sector wagon ordering. How has it been, and which are the sectors which are driving private sector wagon ordering?
Yes, I believe. So I mean, the market is aware that there was a moratorium that was put on the Wagon Investment Scheme, which has actually dampened the private sector uptake over the last few quarters. This moratorium, we believe, should not last for long because there is a lot of appetite from the private sector to buy wagons, and there have been continuous representations. And I also believe that it is a win-win situation that the wagon is invested into by the private sector.
As of now, the wagon procurement that was happening was primarily on SFTO scheme, which is Special Freight Train Operator scheme, and so on, specialized wagons. But the bulk of the wagon demand from the private sector will only come once the Wagon Investment Scheme is reopened. We are waiting and seeing if and when the scheme is reopened, which we believe will be giving a large flip to the private sector in wagon investment. Having said that, we have always maintained as a company that whatever the situation may be, 80% of the wagons are likely to be procured by the Indian Railways. And that's the reason why, as a strategy, we always did not want to put our eggs in a basket, which is not sustainable.
And we always tried to maintain our order book ratio and our execution ratio in a manner that quarter to quarter apart, we should always have the larger chunk of the dependence and focus on the Indian Railways wagon uptake. As a result of that, today we are in a position where we have at least a good order visibility and not dependent only on the private sector. Having said that, private sector is definitely likely to come back, and we are waiting for the wagon investment scheme ban or the moratorium to be reconsidered by the Railways, hopefully very soon.
Sure. Thanks. Two questions on the passenger business. One would be great to get an update on the Surat Metro. And second, over the medium to long term, what is the kind of annual potential in terms of revenues, etc., that we see from the propulsion business? Thank you.
Sure. So as far as Surat Metro is concerned, these are extensions of the two projects, which is Ahmedabad and Surat actually are extensions of Gujarat Metro two projects together side by side. And when I say that the Ahmedabad Metro will start in Q2 of this financial year, it is going to be followed immediately thereafter by the Surat Metro. So the trains are going to be supplied in tandem of each other. So within this financial year, both these projects will attain their peak production and supply. As far as the propulsion business is concerned, to give you the very high-level order of magnitude potential, and I'm talking about propulsion for sales, that is not propulsion for our own consumption, we believe that we can easily look at doing approximately 2,000 traction motors a year, which will give us a revenue of about INR 300-400 crore.
And as far as the EMU, MEMU, and other propulsion systems for the Railways concerned, this should be another about INR 5,700 crore- INR 1,000 crore. Of course, it will take a couple of years, two to three years, to mature. But outside propulsion business has a large potential, and our capacity that we are building, the capability that we are building, is to be able to achieve an overall business of close to INR 1,500 crore only on the sales of propulsion.
That's great, sir. Thanks, and all the best in the future.
Thank you, Parvez.
Thank you. The next question is from the line of Koushik Mohan from Ashika Group. Please go ahead.
Hi, sir. Sir, I just wanted to understand one single thing. On the timeline, what will be our capacities and how many units side we are going to come for wheelsets?
And when it will, the revenue will start reflecting in our books.
Sure. As far as the wheelset is concerned, the contractual delivery is supposed to start from June 2026, and we are very much on track to be able to achieve that. I think more details have also been given by the other joint venture partner in their call about the wheel plant, and it is exactly the same in terms of the revenue ramp-up that has been already shared by them.
Sir, and the second thing I just wanted to understand, what will be our timelines to deliver one wagon, sorry, one car, one metro car? How much timeline do we take it to get it from zero to fully manufactured in our warehouse? Exactly how much time do we can?
Sorry, your voice was breaking up. Can you repeat your question? Your voice broke up.
I'm audible, sir?
I don't know if you have a speaker or because your voice is breaking up, sir.
Hello. I'm audible now, sir?
Yeah. Yes, sir.
Sir, I just wanted to understand how long will we take to manufacture one Metro car?
You mean to say the cycle time from beginning to end?
Yes. From beginning to end. Full from the start to finish and end time.
So it depends upon the different type of cars. There are different configurations that are there, and each one of them has a different cycle. So if I can just explain to you, probably it will be easier. So after designing is done, then prototype stage is done, then there is the controlled series production, and then there is the series production.
Each one of them has a separate cycle time, which are quite different from each other because there is a learning curve involved. I'll probably just speak about once the product is matured, once the maturity level is reached, then the total production time when you start cutting the sheet to the time you are able to roll out the car is considered to be around 60-90 days.
60-90 days. Okay. Sir, and in this year, how many cars that we are planning to sell? Any guidance do we have? Is there any specific number?
We do not give a specific number as a policy, but I have just mentioned to you that we are now, within this year, we are looking at ramping up our production to be able to achieve a run rate of between 20-24 cars or 25 cars a month.
We should be able to do that by the end of the financial year. And by that time, it is going to be a ramp-up on a monthly basis.
Okay. Sir, 20- 25 cars, is it we are talking about selling, or is it only with the manufacturing?
It's the same. I mean, we're definitely not going to produce not for I mean, this is a made-to-order product. It's not a made-to-stock product. So we only produce when we have the orders.
Got it. Got it. And any new development in Bangalore Metro, sir? Are we having any new developments in Bangalore Metro?
New development, as in?
Sir, because recently there was one announcement by Bangalore Metro telling on their yellow line that has been delayed by three months. So I just wanted to understand, is it affecting us, or what was this announcement came from Bangalore Metro?
I have not read the announcement, so I cannot comment upon that. But as far as we are concerned, our production is going on. There were some hiccups in the beginning because, as I have already informed, this is a contract where we are doing only the manufacturing. The material comes in as a free supply from CRRC, and there were some challenges to get the materials on time from CRRC. Now things have gotten streamlined, and now the production is happening as we are expecting them to happen.
Got it. Got it. Thank you. Thank you. I'll get back in touch.
Thank you. Participants, in order to ensure that the management is able to answer questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Amay Sharda from Purnartha Investment Advisers. Please go ahead. Hi.
Am I audible?
Yes, you are.
Yeah. Thanks for the opportunity. Sir, I just had two questions. One was regarding the passenger segment. I think the margins in this quarter have been low as compared to the previous quarter. Any reason for that?
I think the margins have been better in this quarter, if I am correct. We have a margin of about 10% in this quarter. So in fact, it's a positive trend. From 9.44%, it has gone up to 10.4%.
Speaking specifically for the passenger segment, I think they have been reduced from 9%- 3% or 4%.
I do not know which slide are you referring to. If you refer to slide 15, it will be clear.
Okay. I'll do that, sir. Second was regarding the Titagarh Firema audit qualification. That was there in the results. Can you explain that?
What can be the maximum impact we can expect for that?
So as far as Titagarh Firema is concerned, first, I would like to clarify whatever has been mentioned in the notes to our account. It is a situation which is still developing. We still do not have clarity as to which way the situation is going to develop. But we are watching the situation with great care and caution. Whatever was the investment made, a substantial part of it was already earlier provided for in our books. And the balance, whatever is the potential non-cash loss that is possible, has been quantified in our annual accounts.
So just to confirm, the maximum impairment, if at all, we can expect, will be to the tune of book value of the investment in our books, right? Nothing more than that.
That's right.
Okay. Sure. Thank you so much, sir. Thank you.
Thank you. The next question is from the line of Sandeep Mukherjee from SKP Securities. Please go ahead.
Yes, sir. Thank you for taking my question. Sir, what could be our shipbuilding revenue for FY 2025?
You can make out from the investor presentation. We do not disclose this as a separate revenue segment, sir.
Okay, sir. Also, my next question is, in the opportunity pipeline, you have mentioned that propulsion system has an opportunity pipeline of INR 2,000 crore. So is this including traction motor? So can we understand it like you will be delivering it in a kit basis, which includes traction motor, TCMS, and traction converter, or the traction motor is separate from this?
Yeah, both link to each other. There is the traction motors also that are separate.
And then if we go into the details of this, it will be becoming too technical in nature for this kind of a call. But the configuration of propulsion systems are made into different segments, and this is a combination. So I would rather stay with the financial outlook of this rather than getting into the technical nitty-gritties of it. And it is a combination of all the items that you mentioned, which is propulsion, traction motor, TCMS, etc.
Okay, sir. And my next question is, you have mentioned in the opportunity pipeline that Metro coaches contract is opportunity pipeline of 15,800, and Vande Bharat coaches are at least 72,000. So is this the opportunity pipeline for the private sector, or is that something that ICF is also included in it? ICF also produces Vande Bharat and Metro coaches, if I'm not wrong.
So does this opportunity pipeline include the government part also?
Opportunity is in general. We do not still know what if in case the railway decides to get some of these manufactured in government sector. But normally, we are expecting that this is the kind of business, at least as far as the Metro is concerned, it only comes to the private sector. And we expect this is the business that should come to the private sector. But then, of course, government policies is something that we do not have the visibility and the control to comment upon.
Okay, sir. Understood, sir. Thank you. Thank you very much.
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.
Hello. Good afternoon, sir.
Sir, our main production item. Good afternoon, sir. Our main production items are wagons, propulsion system, traction, metro rails, Vande Bharat, and wheels. Sir, in financial year 2026, 2027, and 2028, what kind of turnover we can expect, sir? Total.
We cannot give any forward-looking guidance in terms of turnover. We have already what we shared, and what we can share with you is what is the company's capacity for the different segments.
Yeah, from capacity point of view.
So as far as the segments are concerned, the freight business segment, we have a capacity of doing 12,000 wagons a year, which if we look at just extrapolating the sales number, can give us a potential revenue of around INR 4,000- INR 4,500 crore.
As far as the passenger segment is concerned, the three years are going to completely give a different story as we are in the process of ramping up. You can see it in the investor presentation, how we are ramping up our coach production capacity. So let me speak about the coach production capacity at peak. A coach, I mean, a Vande Bharat and a Metro, on an average, gives us around INR 10 crore per coach of revenue. So that is the kind of capacity that we are creating in terms of the coach production. And the propulsion I've already spoken about. So all the three segments that we have, which is the wagon segment, the propulsion, and the coach segment, all three of them are being scaled up to be one of, if not the largest capacities in the country.
Of course, depending upon a host of other factors, that is the overall market demand, the buoyancy of the country's growth, etc., we should be in a leadership position for all of them. As far as the wheels is concerned, again, we have already mentioned it's a joint venture between Rail Wheel Factory and Ramkrishna Forgings. And the overall capacity that is being created there is for about 220,000 wheels per year, out of which 80,000 wheels is on a guaranteed off-take basis by the Indian Railways. So that's on a ballpark number, each wheel sells for about INR 1 lakh or INR 1 lakh +/- 10%. So that's the kind of capacity that we are creating for the wheel venture. I hope that answers your question.
Yeah.
Sir, we need to INR 20,000 crore [Foreign language] का जो order है for wheels, that is only the Titagarh part or with RK Forging, INR 20,000 crore?
No, the order is about INR 14,000 crore, and that is for the company. That is not Titagarh's part. In our investor presentation, we have mentioned about our share of the joint venture, as you can see it in one of the pages of the order book where our share of the joint venture is mentioned.
This is on page. Question, Metro or Vande Bharat car?
Sorry to interrupt you, but we request you to rejoin the queue for follow-up questions.
Only last question.
So you can join back the queue as there are other participants waiting for their turn. Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Hello. Good evening, sir.
Thank you for taking my question. Hopefully, I'm audible, sir. Hello.
Yes, sir, you are. Yeah, yeah.
Hi, hi. Thank you. So a lot of my questions have been answered, but I got dropped in the call in the between, so I had to rejoin the queue. So I just wanted to know from our order book perspective, I think we have around INR 11,000 crore for our company itself, and I think around INR 13,000 crore in the JV. So I just wanted to know the execution timeline for those, sir.
So each of the orders has a separate execution. And I speak about our company's orders. The freight wagon, the FRS segment orders primarily have about approximately a one-year execution, whereas the passenger segment has a longer execution, particularly on the Vande Bharat.
As far as the JV is concerned, both the service as well as the wheel JV both have a longer-term execution. So the execution of these contracts are all they cannot be clubbed up in one basket. They are all very different in terms of their timelines.
Fair enough. And sir, I just wanted to know, I think the railway, I think a huge order should come in some time. So any kind of conversation that we are hearing when the huge tender will come in, obviously, it's all speculation, but any rough timeline that you all are anticipating or preparing to foresee something coming up soon, or maybe first half, second half, anything you could just comment on, sir?
Yeah, you very rightly yourself commented that commenting anything will be speculative, and we would not like to indulge in that.
But the Railways have set up their target of achieving 3 billion tons of growth on one side. On the other side, the GatiShakti program of the Honorable Prime Minister very clearly defines that the logistics cost of India has to be brought down as a percentage of the GDP in order to. Now we are already the fourth largest economy, which is a great development for us as Indians. And in order to now jump and get to the third largest economy, which I believe is just an arm's length away, we will have to improve upon our cost efficiency. And one of the most lowest-hanging fruit and essential cost efficiency measures that can be adopted and targeted is the logistics cost, for which enhanced railway movement of goods and commodities is a must.
So having said that, we cannot speak about discussions or speculation, but it is our estimate and our belief that the growth in the railway segment or the railway cargo segment should also continue. And being a market leader, being one of the most front runners, and being prepared for this enhanced growth, we should be in a good pole position to be able to be a part of this growth.
Fair enough, sir. Fair enough.
Yeah. Hello? Yes, sir. We can hear you.
Yeah. No, I thought so. I was saying something. And just on the something different part, maybe.
Sorry to interrupt you, but we request you to rejoin the queue for follow-up questions. Participants, it is requested to restrict your questions to two per participant. The next question is from the line of Raj Patel from RK Securities. Please go ahead.
Hello.
Am I audible?
Yes, sir.
Yeah. Thank you for the opportunity. So considering the production challenge and the segmental revenue fluctuation observed in FY 2025, how does the management view the outlook for quarter one FY 2026? Especially, should we anticipate a meaningful improvement in execution compared with quarter one FY 2025, particularly in relation to FRS and Metro deliveries?
Thank you, sir. I've already mentioned that the wheelset problem that was there where those plaguing the industry continues in the first part of Q1 FY 2026 as well. The production of wheelsets is started from today, as a matter of fact, in the Rail Wheel Factory, as we are informed, in the line that was shut. So we expect that from the month of June, the production should pick up. And therefore, normalcy, if I can call, normalcy should attain from this month onward.
There has been a shortage of wheelsets in the earlier parts of the quarter, as is very well known and is in public domain. The Metro production is picking up, and it is continuously going to pick up. And we will achieve the targeted production, as I mentioned, by the end of this financial year.
Okay. And my next question was, we understood that a recent tender was floated for the Nagpur Metro project. So has the Titagarh participated in this bid? And if so, could you please provide us insight on the scope of the project and the competitive landscape?
Number one, Titagarh is participating in every single Metro project that comes up in the country. So there would be no Metro project where we would not be interested, and we will not be participating. Secondly, the Nagpur project is still on the tender stage.
So it is not yet finalized, or it's not yet the tender has not been submitted as yet.
Okay. That was all from my side. Thank you.
Thank you. The next question is from the line of Ravi Gupta from RT Investment. Please go ahead.
Hello. Am I audible?
Yes, sir.
Hello. Yes, sir. So my first question is, could you provide an update on the timeline for achieving the targeted run rate of 1,200 wagons per month? And based on current production trends and operational readiness, is there any revised guidance or internal milestone the company is working towards?
As far as the company is concerned, we are already at. We have already touched on a number of occasions 1,000 wagons a month. The overall wagon capacity is calibrated also on the overall business opportunity available.
As far as the company is concerned, it is also ready to ramp up and get to 1,200 wagons per month. But we shall be only doing that once we see sustainable business demand in terms of the business outlook. And that would also happen once the new tender of the Railways is finalized. But I can confirm that particularly with the expansion of the foundry that we are going to bring on stream within this financial year, we are, as a company, ready to ramp up our production should the market support us in terms of adequacy of volume to produce 1,200 wagons a month.
Understood, sir. So my next question is, what is the management's outlook on revenue growth and EBITDA margin performance for the upcoming quarter in FY 2026 as a whole? And are there any updated targets or internal benchmarks that can be shared?
Unfortunately, internal targets cannot be shared. Whatever could have been shared has already been shared in our investor presentation. So I apologize. We will not be able to share any further numbers apart from that.
All right, sir. Thank you. That's all from my side. Thank you.
Thank you. The next follow-up question is from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.
Thank you, sir, for giving the opportunity. I just wanted to know our projected turnover for wagons. You said INR 4,500 crore per year, 12,000 wagons. For Metro and for Vande Bharat, what is our kind of capacity total?
As I've already mentioned that in our first phase, sir, it's in the investor presentation also in the first phase, which we are expecting to do or asking on a timeline of 2027-2028.
We are targeting to achieve a target of 800 cars-850 cars per annum and about 200-250 traction motors per month. So about 3,000 traction motors.
Sir, like you said, 850 cars, INR 10 crores per car means 8,500?
Your math is better than mine. I need a calculator.
No, sir. Yeah, yeah, yeah. No,[Foreign language] ठीक है, ठीक है, sir. This was my main question. Right, sir.
Thank you, sir.
Thank you, sir. Thank you, sir.
Thank you. Ladies and gentlemen, in the interest of time, we'll take this as our last question. I now hand the conference over to the management for closing comments.
Thank you very much. Thank you, everybody, for joining the call and enriching us with very interesting and very kind of thought-provoking questions. To sum up, I would say that this year, FY 2026 is going to be a very critical year for the company.
It is going to be a transformative year. I would say FY 2026 and then FY 2027 are two very, very critical transformative years for the company because historically, the company has also was the name of the company was a wagon company. Wagon is a stable commoditized business. The passenger rail segment that we have is a big upgrade on technological competence. It's a big upgrade on value addition that we are doing, which is very reflective from the fact that one wagon, which weighs approximately or which volumes are approximately the same as the passenger coach sells at between INR 35 lakhs-INR 40 lakhs, whereas one passenger coach of the same volume sells at INR 10 crore. So that is the kind of technological or the difference in intricacies and complexities that exist.
For Titagarh, this year is going to be the year where we will transform the Passenger Rail Systems into the next level. FY 2027 is going to be the year where the Vande Bharat and the Metro simultaneously will start production at full capacity. These two years are going to be transformational for the year. At the same time, we are very bullish on the Shipbuilding and Maritime Systems , which we are relaunching. We believe that in the years to come, this is something that is going to be a very important part of the group's strategy.
Of course, not having taken or not taking away the importance that the wagon business continues to have for us, which is our bread and butter business, we believe these two new businesses, along with the safety and signaling systems, which is going to be primarily on the business development stage over the next one or two years, I don't expect that to get reflected into our P&L, but more into our order book, is going to pave the way for the years to come. The company is fully prepared for all these segments and is very excited. The government of India has continued to give a big focus on infrastructure, particularly on mobility and urban mobility. We have seen a number of announcements of projects, whether it is for metro, whether it is for local trains like Mumbai Locals or Vande Bharat, etc.
And we are very excited and very honored and very privileged to be in this industry in this time of growth of the country. So thank you very much for the support from everybody. And we look forward to reporting substantive progress, particularly the PRS, during this financial year. Thank you very much and have a great year ahead. Thank you.
Thank you. On behalf of Titagarh Rail Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.