Ladies and gentlemen, thank you for being so patient. The call will begin shortly. Kindly stay connected. Ladies and gentlemen, good day and welcome to Titagarh Rail Systems Limited Q2 FY26 earnings conference call. As a reminder, all participant lines will be in 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 touchstone phone. Please note that this conference is being recorded. I now like to hand this conference over to Ms. Prachi Ambre from MUFG Intime, Investors Relations Team. Thank you, and over to you, ma'am.
Thank you, Shravani. On behalf of Titagarh Rail Systems Limited, I extend a very warm welcome to all the participants on Q2 and H1 FY26 financial results discussion call. Today on the call, we have Mr. Umesh Chaudhary, Vice Chairman and Managing Director; Mr. Anil Agarwal, Deputy Managing Director; Mr. Pratish Chaudhary, Deputy Managing Director; and Mr. Saurav Singhania, Chief Financial Officer, to provide the operational and financial insights. 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 Mr. Umesh. Sir, over to you, sir. Thank you.
Thank you, Prachi. Very good evening, everybody, and thank you for joining the Q2 earnings call. As you have already got the numbers, the new addition this time that has been given is the strategic plan of the company, which, for the first time, we have been able to give a very clear picture on the trajectory that the company is going to follow, in terms of the acceleration system and the other businesses that the company is in. As regards the current quarter is concerned, as I had mentioned earlier also, one month of this quarter was impacted by the wheelset availability, and then the wheelset availability, which was primarily impacting the company for the last two or three quarters, has been resolved. We have started getting normal wheelsets from the month of August 2025.
Now the wheelset availability is normal, and we are back to around 800 wagons a month, and we intend to continue between 800 and 850 wagons per month going forward. We also believe that the wheelset problem should be behind us, as the joint venture of ours, along with Ramkrishna Forgings, to produce wheels in Chennai, will get operational by Q1, Q1 of next financial year. This would be a problem that has perennially been causing trouble to the industry, to the wagon industry. This should be a problem of the past. As far as the passenger rail business is concerned, we have got some very, very interesting new orders, two orders that we got from Mumbai for Mumbai Line 5 and Line 6 that build up the pipeline of the Metro Coach business up to FY 2028.
The visibility is there with the order book, and we have also given in the presentation a ramp-up plan of the entire, of the different SBUs of the passenger rail system, which is the Metro SBU, the Vande Bharat and the passenger train SBU, as well as the propulsion SBU. We are fairly confident of being able to achieve the targets of all these SBUs that we have given. With those few introductory comments, I'd be very happy to take any questions. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. 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 Parvez Qazi from Nuvama Group. Please go ahead.
Hi, good evening, sir. Thanks for taking my question. So a couple of questions from my side. First, I think we have about six different orders in the passenger coach segment, across Vande Bharat and the five different MetroRail projects that we have. Would be great to hear your views on when can execution start on each of these individual six projects. And second is on the wagon business. It's great to hear that wheelset availability has now become normal, and we have ramped up to our usual mandate. With regards to features, what is our view on wagon tendering, especially from the inventory? Thank you.
Thank you, Parvez. As far as the metro or the passenger train, rail segment is concerned, the Pune, as you know, we have already supplied. Now we've got the option, that will be starting in two years' time. We have a delivery period of starting from two years to be ended in two and a half years, because that is an aluminum coach. We have already received the machines for making the aluminum coaches entirely in India. The earlier contract that we had executed for Pune was executed by bringing in flat packs from Italy. Now we have set up the entire facility. The machines have come, they are under installation. They will be getting into production sometime in Q1 of FY 2027. We will be producing the entire car body of aluminum for Pune in our plant in Uttar Thara.
As far as the Gujarat Metro is concerned, this quarter, that is Q3 of the current financial year, we'll deliver the prototype. Then the production will ramp up, in the manner that is in the chart in the contract, so between two and three trains per month, going up to three trains per month. We have given the overall numbers of coaches, which includes the Gujarat as well as the Bangalore, that we intend to be able to deliver this year, which is between 100-120 cars, which is almost an 8-10-fold jump over the number of cars that we delivered last year, which will again almost double next year. It is a huge ramp-up that we are going to witness.
As far as Mumbai is concerned, the first train should go somewhere in Q3 of next financial year, Q3 or Q4 of next financial year, and then it will get ramped up. For Vande Bharat, again, we are intending to deliver the first train, the Vande Bharat sleeper. The first car body is already made, and we are intending to deliver the first train in Q3 of the next financial year. That ramp-up will happen in all the passenger orders that we have. As far as the freight wagon is concerned, we have an order of about 8,000-8,500 wagons, 9,000 wagons, I'm sorry. That gives us visibility for the next around four quarters. We are considering the overall demand forecast and the traffic forecast that targets that the railways have.
We are hopeful that the tenders should come out by Q1 of the coming financial year. We will have enough time to switch over or complete the existing contracts and then get on to the new contracts.
Okay. Thank you, sir. I will come back to this for more questions.
Thank you.
Thank you. The next question is from the line of Amay Sharda from Purnartha Investment Advisors. Please go ahead.
Hi sir. Thank you for the opportunity. I just wanted to ask, like, can you share the number, like, how many wagons did we send out in the September month, last month of Q2?
I'm sorry, I didn't get your question. Can you repeat your question?
Sir, in Q2, last month, like September, how many wagons did we produce, freight wagons?
We've got the monthly figures, Mr. Sharda. We can only give you the quarterly numbers. We have disclosed the quarterly dispatch of wagons in our presentation, which is 1,872 wagons during Q2 of the FY 2026.
Okay. Just like, and that has normalized now, and we'll do 800-850 going forward, right?
Yeah. On an average, yeah, approximately 800 wagons we should consider, for the plans of execution. Although our capacity is 1,000 wagons, but in order to wait for the new tender to come in, until that time to have an even workload, we are planning to do between 800 and 850 wagons.
Okay. Okay. The next question was regarding the Line 5 and Line 6 Mumbai Metro order that we received. Like, can you bifurcate how much is the AMC value and how much is the value for just the delivery of wagons?
Approximately 15% is the AMC value, and the balance is the supply value.
Okay. Okay. Okay. 15% is AMC. And sir, one last question was regarding the net rate.
Net rate, I think it's approximately 3% per year. That's the normal trend of Metros. In the case of Vande Bharat, it is 4% per year.
Okay. Okay. Got it. Last question was regarding the tax rate for this quarter. I think the tax rate was a little high. Any reason for that, or will it get normalized going forward?
I'll request the CFO to answer.
So, yeah, the tax rate was approximately 26% something percentage, but it's just the effect of certain transactions when it happened during the quarter. But it will normalize over the year. It will come down to almost like 25.5%, which has been the standard rate for us.
Okay. Sure. Thank you so much. That's it from my side.
Yeah. Thank you.
Thank you. The next question is from the line of Archita Agrawal from Steptrade Capital. Please go ahead.
Hello. Yes, sir. Please go ahead.
Yes, sir. Sir, you have given the guidelines for 1,000 coaches per FI 26, right?
Sorry, sir, please pick up the receiver and speaker. There's some disturbance on the line.
Yes. Hello. Hello.
Hello.
Yeah, please go ahead, sir.
Hello. Sir, I think there is some network issue. Am I audible? Hello. Hello.
Yes, please go ahead.
Please go ahead.
Hello. Sir, question is with regard to that, guidance of the 1,000 coaches. Sir, is it still doable or not? What is the progress? When we look at this, six months, can you throw some light on the first half number out of that 1,000 coaches guidance?
We've not given any guidance for 1,000 coaches, sir. We have given a guidance for between 100-120 cars of coaches in this financial year. I mean, we are very welcome to actually be able to achieve that. We've given this, released this guidance, week. We were not considered as being able to achieve that. We would not have been given.
When we look at, when we look at quarter one guidance, ma'am, so it shows 1,000 coaches or wagons per month, right? That is the run rate for entire FY 2026.
I think you are mixing up between the wagons and the coaches, sir. Wagons, we have two, there are two segments that the company operates in: the freight segment and the passenger segment. The run rate, the capacity that we have for the freight segment is 1,000 wagons per month, which has been impacted due to the wheelset problem. Now that the wheelset problem has been resolved, we have a capacity to do 1,000 wagons. To even out till the new tender is published and finalized by the railway, the company wants to do between 800-850 wagons in order to even out the workload, in anticipation of the new tender.
As far as the passenger coaches is concerned, metro coaches is concerned, we have given a guidance that this year, we will do between 100-120 cars, and we are well on track to be able to do that.
Okay. So, sir, for this freight wagon, can we say for the second half, it will be 6,000 or 5,000?
I just mentioned it's going to be 800-850 wagons per month, sir.
Okay. Okay. Understood. Okay. Thank you.
Thank you. The next question is from the line of Pranjal Jain from Morgan Stanley. Please go ahead.
Yeah. Thanks for the opportunity. Sir, I have two questions. One is I wanted to kind of understand in terms of execution risk while you kind of elaborated on the freight side. I wanted to see if there are any execution risks that you foresee on the passenger side or any supply chain issues that one can kind of foresee in the near future.
Yeah, Pranjal, so thank you. We have already factored those in. You know, we have been in this business for a while now. We started making passenger coaches and metro coaches in 2021 in the Uttar Thara factory. The reason why we have, for the first time, put out the standardized our production setup, and we are confident of being able to achieve the ramp-up run rate that we have given in our presentation. In terms of supply chain problems in our industry, supply chain problems is, is, and almost like goes hand in hand with existence. We will continue to have that problem somewhere or the other, and the bottleneck keeps on shifting. That is exactly where we are, we have been prepared for, and we have geared ourselves up for to be able to address all these issues as we come along.
Having said that, I would also like to state that one thing that we have now taken up and, to a great extent, I would say implemented and the balance will be implemented within this financial year is a lot of backward integration in terms of making of these coaches. All the supply chain that we were dependent on for making car bodies, within this financial year and March this year, we will have almost entirely 100% will be in-house with us. That will take, or address, a great deal of supply chain technologically and, facility-wise, process-wise, approval-wise, order-wise, we are all geared up.
Sure, sir. Secondly, if you could kind of elaborate a bit more on the shipbuilding and what are the prospects and what kind of addressable market would you see? These will be my questions. Thank you.
I'm sorry, I just lost your question. You said on the shipbuilding, what is the question?
On shipbuilding, if you can elaborate, what kind of segments are we targeting? What is the addressable market? Which are the key capabilities that we are kind of targeting towards?
As far as the shipbuilding is concerned, over the last few years, we've delivered more than 35 vessels to the Indian Navy, to the Coast Guard, to the National Institute of Ocean Technology, to GRSE. We've also exported a vessel to Ghana. We have developed a great deal of capability over the last five, seven years that we have been in this business. Now, in line with the government's policy, where the government of India has decided that India must be atmanirbar also on the shipbuilding side, the industry is being given a great deal of emphasis. We have kind of been able to leverage upon all these expertise, the qualifications that we had in the past, to be able to grow this business.
We will concentrate only on the specialized shipyard, apart from some very few bulk shipyards, ships, sorry, which we can consider from time to time. Primarily, our focus is going to be on specialized vessels. We will focus on vessels which are between 100-150 meters or 160 meters in length. The yard that we are building in the south of Bengal in Palsa, where we've already gotten a jetty as well, a concrete jetty, and we had acquired this land by way of acquiring a company or land from a company called Precision Shipyard. With this, we will be able to have a capacity of being around 16-18 vessels per year. We are already a Naval-approved shipyard, so we are also working on enhancing the type of vessels that we can deliver to the Indian Navy.
In our presentation also, we have given some of the vessels that we have manufactured in the past.
Sure. Thank you. That's it from my side.
Thank you. The next question is from the line of Balasubramanian from Arihant Capital. Please go ahead.
Good evening, sir. Thank you so much for the opportunities. If I mentioned 120 cars by end of the year, 100 passenger coaches side, and whether you are completely ready with in terms of supply chain for specialized components, labor skilling, and, like, everything is readied for the exhibition side, I just want to understand. It needs also higher working capital side, how you are going to manage those?
Yes.
Hello.
Just a moment. Ladies and gentlemen, the management line has been disconnected. I will quickly get connected. Thank you.
Hello?
Ladies and gentlemen, the management line has been connected. Sir, please go ahead.
Yeah. Thank you.
Yeah. Please, there was a network problem, and we lost the connection. I was mentioning about the ramp-up that we are fully confident. As far as the, and that's the reason we have given a complete road map of the ramp-up that we will have not only for the current year but for the coming few years, and also how we are backed up with confirmed order books for the metro coach up to FY 2028 and for the Vande Bharat up to FY 2031. As far as the working capital is concerned, the company has sufficient working capital limits, which is unutilized. We are very comfortable in terms of the working capital management.
Okay, sir. Sir, Ferema currently facing challenges on what is the revised international strategy. Are there plans to update our international metro or train contracts, using the Indian manufacturing base? And, and now we have our in-house design capabilities also. And what we are going to do, in Ferema, whether we are going to exit or, is there any, final resolutions as, maybe in, in a shorter period of time?
As far as Ferema is concerned, there were multiple objectives for the investment into Ferema. The primary one of them was to be able to set up the facility in India with the transfer of technology, know-how, and credentials. Titagarh has already been able to do that. Now we are a leading manufacturer of coaches, perhaps, with the largest order book for passenger coaches in India. Today, our order book, including both Metro and Vande Bharat, is larger than what other, even foreign companies or Indian companies in India have. That has been possible because of the initial support that we had got from Ferema. That strategy is fully achieved and accomplished. We had mentioned that the operational requirement and the capital requirement of Ferema that is required, it is a joint venture between us and the government of Italy.
The government of Italy owns a little above 30% in that. We are in discussion with them to dilute ourselves substantially and let one of the arms of the government take control of that company. As regard the international strategy is concerned, the international strategy of Titagarh would continue to export, not to manufacture in Europe or other countries. We will continue to pursue our endeavor to export products from India, either to Ferema or to other customers. Currently, the overall market and the order pipeline in India is very robust. We are focusing primarily on the Indian market and developing additional capabilities and competencies like the aluminum coach line, because in most of these developed countries, Europe, etc., the coaches that they buy are of aluminum and not of stainless steel.
Over a period of time, we will re-enter in a significant manner the international market and start exporting coaches. For the time being, we are not looking at manufacturing presence outside India.
Okay, sir. Sir, on that vessel business, we have a 14-16 vessels per annum on the capacity side. What is the average realization per vessel? What are the upcoming deliveries on that? What kind of order book do we have right now? What kind of inquiry pipelines are we witnessing?
Are we talking about the passenger side of the of Indian company?
Vessel, sir. Vessel. Ship.
Shipbuilding. I'm sorry. Okay.
Yes.
Shipbuilding, we have already declared we have about an INR 500 crore order book, and we have a very heavy pipeline of inquiries. We have been seeing a lot of announcements from various ministries about their requirement of vessels that will be in the coming years. We met from Indian shipyards. We are seeing a very healthy pipeline. We cannot disclose any of these till they are matured because we do not like to, for both competitive reasons and for proprietary reasons, we do not want to be announcing any one of them in haste. As they develop and they become mature, we will definitely come back and announce that.
Okay, sir. Thank you.
Thank you. The next question is from the line of Amitoj Singh from B&K Securities. Please go ahead.
Thank you so much, sir, for taking my question. I had one question on the service side. I think I missed that in the early part of the call. How much portion of the Mumbai Metro, both Lines 5 and 6, are service contracts?
Yes, sir. It's 15%. 15% is the service, and 85% is the supply.
Is the supply part. When is the service scheduled to be started? After the first delivery for the?
There is a two-year warranty, unlike Vande Bharat, where the service contract starts immediately after delivery. In the case of after the warranty period, there's a two-year warranty, and then there is an AMC contract that comes in.
Okay. Got it. Got it. Sir, just wanted to ask you, what is the scope that you see in these service contracts? Any guidance on, you know, how much margins we make on these contracts?
Service is traditionally a high-margin business. The overall trend of the market is to go for comprehensive contracts, which means supply plus servicing. We've seen that in Vande Bharat, where the contract was placed with a supply with 35-year AMC. We've seen this in Mumbai, where it is supply plus five year, and we believe that it may be also extended beyond five years. We are seeing that in other tenders that are coming out now. We believe that this is something which is going to be the order of the day. Obviously, globally, the service business always is a much better margin business. Depending on the type of the product and year of the, the age of the product, this can give anything between 20-30% EBITDA levels.
Got it, sir. Got it. Okay. My next question was on the propulsion system side of the business. I think earlier we had mentioned that we were focused on completely backward integrating traction motors, considering that we had a partnership with ABB around that. What is the, how has that been ventured out? Just wanted to ask that.
We have given that also in our strategic plan. If you see the strategic plan and outlook, it speaks specifically of the propulsion system as a separate SBU. There we have also explained how this propulsion system is going to be an SBU that will take care of our internal requirement, but also is going to be selling components to Indian Railways and to others. Traction motors, we are already selling substantial traction motors to Indian Railways. We have been doing that. This quarter, we will start our first propulsion system supplies also for EMU Memo. The TCMS is something that we have taken a complete transfer of technology from ABB, with whom we have a ToT agreement. In this manner, the component part, the cabinet cubicle, now we are completely 100% doing it already for our existing metro.
All the items that we are doing as far as the propulsion system, electricals, and components, over a period of the next couple of years, we are intending to do, including our own propulsion. Maybe it will take two to three years because there is an eligibility that one has to go through. Between two to three years' time, we will be able to do our own propulsion for our metro coaches also.
Got it, sir. Thank you so much. That was it from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Sahil Kanade from Asian Market Securities. Please go ahead.
Hello. Thank you for the opportunity.
Yes, sir.
Sir, my question is on freight order book. What proportion of your current freight order book is linked to replacement versus new demand? How do you see this evolving over the next few years?
One is that, as I mentioned, we have an order book, which is giving us a visibility for the next four quarters or so. As far as the new wagon order is concerned, today, Indian Railways is moving about 1.6 billion tons of traffic. The stated target of the railways is to move 3 billion tons by 2030. Considering that the wagons get replaced in between 25-30 years, depending on the time when the wagons were added, because the older wagons had a shorter life than the newer ones, we believe that the wagon demand should continue to remain healthy. Therefore, that gives us the optimism that the new tenders should come out somewhere in the beginning of the next financial year.
Okay. Thank you.
Thank you. The next question is from the line of Tisha from Sapphire Capital. Please go ahead.
Hello. Hello.
Yes, ma'am. Go ahead.
Am I audible, sir?
Yes, ma'am. You are.
Yeah. Firstly, thanks a lot for the opportunity. Sir, my question was on the PRF segment side. Initially, we had mentioned, like, the EBITDA margins that we will be hitting will be around 8-9%. As volumes start kicking in, we will be able to reach the 11-12% margin level. What is, like, the sort of monthly run rate of coaches that we have to achieve in order to reach this 11-12% margin level?
Yes, ma'am. We believe that, when we are able to, the break-even point or the cutoff point to be able to get to this operating leverage is approximately 150-200 coaches a year, where we should be able to reach the run rate from Q4 this year.
That we're expecting to reach from this quarter four, right?
The Q4, we will be able to reach the run rate of 150-200 cars per year.
All right. Yeah, I understood. The second question was on the shipbuilding side. I understand, like, it is at a very nascent stage. It will take some time to ramp up. Like, say, three-four years down the line, what's the sort of revenue potential we see from this side? Also, how's the margin profile?
Ma'am, the shipbuilding, as we have given in our presentation, the capacity that we are planning is for 15-18 vessels per year. Each vessel, depending on the intricacy of the vessel and the nature of the vessel, sells anything between INR 100 crore-INR 250 crore per vessel. That's the kind of addressable market that we are targeting. We believe that the market size is very large, considering the focus of the government of discouraging import and making India self-reliant and self-sufficient in shipbuilding. Normally, since we are going to be in the specialized shipbuilding sector.
Yeah.
This industry gives about 15-17% EBITDA margin.
15%-17% EBITDA margin.
That's right. As you very correctly said yourself, it's a very nascent stage of the ramp-up of this business. Things are still developing. We are hopeful, and we are confident of being able to get to these numbers.
All right. That's great to know. Thank you so much, sir. That's it from my side.
Thank you.
Thank you. A reminder to all the participants that please restrict yourself to two questions per person. The next question is from the line of Deepak from Sv an Investments. Please go ahead.
Yeah. Hi. Good evening, sir. Sir, I just wanted to check it out on the, on this passenger side of the business. We have given the production target of 200 and then, scaling up to 300 for the Metros. And then, Vande Bharat production is also scaling up to 30 from 32 to 192 in FY2028. And the PRF segment, we already mentioned that we are looking at 12% kind of margin by Q4. If you can also give the broader sense, once this Vande Bharat also comes into the picture when the production for this is, what, what kind of blended margin we would be looking at out?
So, as I mentioned earlier also in the earlier calls, Metro, when we do our own propulsion, then we are looking at an increase of EBITDA margin by at least 4-5%. Till that time, we are looking at both Vande Bharat and Metro at a margin profile of around 11-12%. The propulsion is a slightly higher margin business, where we can target anything between 15-20% of margin. The service is another business which is a higher margin business, where we can look at an EBITDA of between 20-25%. If you look at the overall passenger rail segment, it is divided into these four SBUs, as we have given out or laid it down in our strategic plan also. Each one of the SBU has its own margin profile.
We have tried to explain how each one of the SBU is likely to ramp up in the period to come.
Okay. And then, sir, what would be the, I mean, either on the SBU side, what would be the kind of margin we are looking out for the Vande Bharat, or what is the blended margin we are looking at out for all the SBU together?
I just, just gave you the number, sir. 11-12%.
Okay. Okay. Yeah. Thank you and wish you all the best, sir.
Thank you so much.
Thank you. The next question is from the line of Ashish Shah from HDFC Mutual Fund. Please go ahead.
Yeah. Thanks for the opportunity, sir. Wanted to maybe dwell a little bit more on.
Sir, your voice is very feeble.
Yes, just one second.
Yeah. Better now?
Yeah. Much better.
Yeah. Sir, just wanted to dwell a bit more on the shipbuilding side. What type of vessels are we talking about when we are saying 15-18 vessels a year? Typically, what would be these vessels? Also, the other related subject is that what will it take for us to be able to really be able to manufacture this? I mean, is there going to be a substantial amount of CapEx, or a capability buildup or a technology tie-up? If you can just maybe dwell a little bit on that, sir.
Sure. Absolutely. As we have explained, we are looking at doing this in a separate vehicle with a strategic stroke financial partner. This company we would like to grow and develop on its own. The parent company, which is Titagarh Rail Systems, does not want to keep this as a part of Titagarh Rail Systems because of the opportunity size being so high, as we have expressed in the strategic plan and outlook. The existing order book between the different businesses is close to INR 30,000 crore, INR 28,000-29,000 crore today. The new tenders that are there in the market or likely to be there in the market is also very, very large. We believe that there are three business segments in the company which the company has nurtured, the company has developed.
The primary business is the railway system business that would continue to be in the Titagarh Rail Systems umbrella. The other one is the marine or the shipbuilding side, which is being spun off to Titagarh Naval Systems, wherein we will, at, we will induce about INR 50 crore of capital from the company. This company can then raise its own capital, debt, etc., to build up the capability and the capacity. The third, for which the board has constituted a committee to evaluate, is the defense and bridge segment, where the order book today is very, very small. It is almost insignificant, less than INR 40 crore.
There does lie a very large opportunity in this segment because, again, here, the company has in the past done a number of marquee projects for the Indian Defense Forces, including some strategic equipment like nuclear biological and chemical warfare shelters, launching systems, etc., etc. This is something that is being evaluated. The idea would be then again to see how all the three businesses can be grown but grown independently without dependence or interdependence on one another. As regard the kind of vessels that we are looking at doing in the shipbuilding, it is primarily, as I said, naval vessels or research vessels and some specialized vessels for the general maritime systems. We have done fast patrol vessels. We have done diving support craft, which is the first time diving support craft has been designed and manufactured in India.
Vessels like these, that is, is being targeted by us to be done in our shipyard.
Right, sir. Sir, in the Mumbai Metro project, you said that, you know, by 3Q or 4Q of 2027 is when the first delivery starts, the first train will get delivered. This is for both the packages or only the Line 5 that we were talking about?
I'm sorry. I lost your voice. Can you repeat your question?
I'm saying, sir, that we have two new orders from Mumbai Metro, the line five and line six. Now, the 3Q or 4Q 2027 timeline that you gave for the commencement of the delivery, that is for both the metro lines or that is for maybe one of the lines? Because I know that they were under—yeah.
Sure. The delivery schedule for line five, line six is before line five. But the vehicles are going to be quite similar to each other. So, you know, we will adjust the delivery of the line based on the customer requirement, as such because there's not much of a difference between the metro coaches for both the lines. But, since we had got the contract of the line six before line five, there is a headway or a, earlier delivery for line six by about four- to six weeks, something like that, maybe eight weeks.
Right. It starts, let's say, end of, by 3Q or 4Q of 2027. And, over what period the entire delivery has to be done?
and I'm speaking from just memory here, so, barring some errors, it'll be completed in about a year and a half or so from the date it starts.
Okay.
Between a year and a half or two, 18-24 months.
Right, sir. All right, sir. Yeah. That's all. Thank you.
Yeah. Thank you. More details. Yeah.
Thank you. A reminder to all the participants, please restrict yourself to two questions. The next participant is from the line of Sandeep Mukherjee from SKP Securities Limited. Please go ahead.
Yes, sir. Thanks for taking my question. Sir, can you throw some color on.
Yeah.
What adjacencies are we looking forward to in the wagon leasing business?
I'm sorry. What's the—can you repeat your question, please?
Yes. Yes, sir. Sir, what adjacencies are we looking forward to in the wagon leasing business, sir? Like, we have applied for the license for the wagon leasing license.
I didn't get your question. What adjacencies in the sense? I'm sorry. I didn't understand.
Sir, we have applied for the wagon leasing license.
The synergy.
Leasing. Wagon leasing.
Yeah. That's right. Yeah.
What adjacencies should we look forward in this business, sir? What are the—
Okay. I'll answer it, what I wanted to— your question is, what is the— what is—yeah. Basically, you know, the private sector wagon demand which has been there has, has been, primarily, or I would say to a great extent, many of the customers are looking at wagons on long-term lease model. In order to be able to offer or capture that part of the market or have more effective private sector demand, we have taken a wagon leasing license. We also believe that there have been newspaper reports that maintenance of wagon is going to be permitted to the leasing companies of wagons, or the wagons that are given on lease can be maintained by the owner of the wagons, which are the leasing companies. We believe that's a very interesting business to be in.
In order to be able to, enhance the market share in the private sector business and also keep the options for the retainers of wagons open with us, we had the experience or we met the qualification criteria to get the wagon leasing license thanks to a leasing transaction that the company had done in the past for wagons to Indian Railways. We have applied, and we are hopeful of getting this license soon.
Okay. Thank you, sir. Thank you.
Thank you. Ladies and gentlemen, in the interest of the time, this is the last question. I now hand over the conference to Mr. Umesh Chowdhary for closing comments.
Thank you, Mr. Chowdhary. Thank you for a very interesting set of questions and the information. I would only like to close by once again drawing attention to the strategic plan and the outlook document that the company has presented, which gives a complete roadmap of how the company is likely to develop and the trajectory of how the company is going to make a tectonic shift from being predominantly a freight wagon company to a passenger train and metro coach and a high-value-added commodity manufacturing company, and how the strategic joint ventures that the company has are likely to benefit both strategically and financially the overall size and the balance sheet of the company in the years to come. Thank you once again for all the support, and thank you for joining this call today.
Thank you. On behalf of Titagarh Rail Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.