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* Summaries created by AI. Please verify by checking the actual call transcript.
Key Highlights • Date of Call: February 5, 2024 • Submission: Transcript submitted to National Stock Exchange of India and BSE on February 8, 2024. • Key Executives: Vice Chairman Umesh Chowdhary and other executives.
Achievements • Produced over 1,000 wagons in December 2023. • Raised INR 700 crores through Qualified Institutional Placement (QIP). • Order book valued at approximately INR 27,500 crores. • Strategic partnerships announced to enhance product lines.
Production and Capacity Plans • Targeting 15-20 coaches per month in the next fiscal year. • Aiming for 70-72 coaches per month within 3-4 years. • Stabilizing freight capacity at 1,000 wagons per month before further expansion.
Financial Insights • Planned investment of INR 1,000 crores over the next few years. • EBITDA positive at current volumes. • Margins in the passenger segment expected to improve by 4-5% with full integration of propulsion systems.
Market and Order Book • Order book includes service contracts. • Passenger segment's contribution expected to increase in upcoming quarters. • Revenue dip attributed to completion of the Pune Metro contract.
Strategic Goals • Ambition to achieve market leadership in the passenger segment. • Monitoring government announcements for new railway corridors. • Plans to recalibrate strategies post-election based on the upcoming budget.
Production Timelines • Wagon orders have a gestation period of 5-6 months; passenger coach orders take 12-18 months. • Wheelset factory production expected to begin in 2025.
Partnerships and Global Participation • Strategic partnerships with ABB and Sidwal for future growth. • Optimism about participating in global tenders, focusing on self-sufficiency in propulsion systems.
Future Outlook • Targeting a margin of 8-10% in the passenger rail segment by 2026. • Update on Italian joint venture, Titagarh Firema, with a new order worth nearly EUR 1 billion expected to contribute positively by 2025-2026.
Conclusion • Emphasis on cautious business expansion and alignment with India's infrastructure growth initiatives.
Key Highlights • Date of Call: October 19, 2023 • Submission Date: October 26, 2023 • Participants: Key executives including Vice Chairman Umesh Chowdhary
Company Performance • Strong performance in freight rolling stock and passenger rail systems. • On track to produce 1,000 wagons by fiscal year-end. • Secured contracts for stainless-steel metro coaches in Surat and Ahmedabad. • Progressing well on the Vande Bharat project with expectations for a modern sleeper train. • Launched a driving support craft for the Navy under the Make in India initiative. • Improved gross margins due to favorable product mix and efficiency.
Financial Projections • Projected sustained EBITDA margins of 10-11% long-term. • Targeting a 10% EBITDA margin in the passenger rail segment by mid-next financial year.
Order Book and Market Share • Estimated contribution of private players to the order book at INR 3,500 crores. • Company holds a 32% market share based on recent wagon dispatches. • Ongoing projects include a wheel set plant with production expected to start within three years.
Revenue and Demand Insights • Improved performance in the private sector noted. • Factors driving private wagon demand include economic synergies and user-friendly railway approaches. • No new entrants in wagon manufacturing recently due to lengthy approval processes.
Receivables and Cash Flow • Temporary increase in receivables attributed to backloaded sales and payment term shifts. • Confidence in maintaining a net working capital cycle of under 30 days for freight rolling stock.
Future Opportunities • Significant opportunity in metro rolling stock estimated at INR 50,000-70,000 crores over the next 5-7 years. • Well-positioned for future Vande Bharat train tenders with costs ranging from INR 120-140 crores.
Capital Expenditure and Production Plans • Planned capital expenditures of INR 600-700 crores this fiscal year without additional funding needs. • Aiming for a monthly production run rate of 600-700 wagons, targeting 1,000 by year-end.
Conclusion • Optimism expressed regarding future growth in both freight and passenger sectors. • The call concluded with gratitude from participants and the moderator.
Key Developments • Major Contracts Signed: • Vande Bharat train project • Wheel project • Contract with Gujarat Metro for stainless-steel metro cars • Performance Outlook: • Anticipated growth in freight and passenger rolling stock segments
Production and Capacity • Current Production Rate: • 20 cars per month, with plans to ramp up to 70 cars by Q3 FY24 • Capacity Utilization: • Currently at 20-25%, affecting margins
Order Book and Sales • Significant Contracts: • INR 12,716 crore Vande Bharat project • Metro orders exceed INR 896 crore • Wagon Sales: • Healthy demand, particularly from Indian Railways
Project Progress and Future Plans • Contractual Delivery: • On track for Vande Bharat trains and metro projects • Production Capacity for Traction Motors: • 180 motors per month, indicating strong demand • Wheel Factory Update: • Production expected to start by April/May 2026
Financial Performance • Sustainable EBITDA Margin: • Expected around 10%, with current quarter margins performing well • Revenue Contribution: • Passenger business contributes 18-19% to overall top line
Strategic Initiatives • Forged Wheels Market: • Plans to transition from net importer to net exporter, targeting INR 2,000 crores in annual revenues • Atmanirbhar Bharat Initiative: • Exploring further opportunities in the rail system sector
Conclusion • Positive Outlook: • Confidence in order book and demand visibility for the coming years, with a focus on stabilizing production and meeting contractual timelines.
Call Details • Date: May 29, 2023 • Time: 4:00 PM • Duration: Approximately 64 minutes • Key Executives: Umesh Chowdhary (Vice Chairman), Anil Kumar Agarwal (CFO) • Moderator: Mohit Kumar (ICICI Securities) • Transcript Availability: Company website • Compliance: SEBI regulations
Company Transition and Growth • Transitioned from wagon manufacturer to rail systems manufacturer. • Operations segmented into passenger and freight rail systems. • Order book increased from ₹1,600 crores to over ₹27,000 crores. • Record revenues of ₹2,781 crores in FY23. • Key projects: • Manufacturing 80 Vande Bharat trains with BHEL. • 20-year agreement to supply 80,000 wheels annually to Indian Railways.
Financial Performance • Q4 FY23 Revenue: ₹974 crores (131% increase YoY). • EBITDA: Increased by 114%. • Profit Before Tax: Surged by 173%. • Year-over-year growth: • Revenue: 86% • EBITDA: 57% • Profit Before Tax: 85% • Improved financial ratios: • Return on Capital Employed: 6.5% (FY19) to 26% (FY23). • Return on Equity: 5.2% to 16.3%.
Q&A Highlights • Vande Bharat Train Order: Total contract value of approximately ₹24,000 crores. • Financial Disclosures: Management acknowledged need for clarity on contract liabilities and joint ventures. • Propulsion Systems: Approval process ongoing; full independence expected in 2-3 years. • Traction Motor Production: Capacity of 150-200 motors per year, ramp-up expected. • Wagon Production: Aiming to increase from 2,000 to 3,000 wagons per quarter. • Metro Business: Significant growth potential identified.
Future Plans and Strategies • Order Book in Italy: Approximately EUR 450-500 million. • Capital Expenditure: Planned around ₹1,000 crores over the next 4-5 years. • Production Goals: Targeting 700-800 passenger coaches per year. • Funding Strategy: Conservative approach to debt; no current plans for equity raising.
Risk Management • Acknowledgment of risks in contracts with joint liability clauses. • Emphasis on strong partnerships to mitigate risks. • Capability to manufacture aluminum coaches confirmed.
Commitment to Infrastructure Development • Management expressed gratitude for support. • Commitment to contribute to India's infrastructure under initiatives like Make in India and Atmanirbhar Bharat.
Financial Performance • Record Turnover: Rs. 766 crores, a 101% increase from the previous year. • Current Order Book: Rs. 10,130 crores, with Rs. 1,200 crores from the private wagon market.
Growth Drivers • Indian Railways Budget: Rs. 2.4 lakh crores allocation. • Production Capacity Plans: Increase from 650 to 700 wagons per month, with future plans for 800-900 wagons.
Market Potential • Traction Motor: Significant domestic and export opportunities. • Forged Wheel Project: Dependent on winning tenders, financial impact uncertain.
Capital Expenditure (CAPEX) • Planned Spending: Rs. 1,000 crores over 4.5 to 5 years, with Rs. 300 crores already spent. • Focus: Bottom-up approach to achieve capacity targets efficiently.
Profitability and Margins • EBITDA Margin Target: 8% to 10%, despite fluctuations in contract margins. • Debt Management: Conservative policy with manageable CAPEX costs.
Project Updates • Pune Metro: 15 out of 34 trains delivered. • Bangalore CRRC Project: Production set to begin soon.
Order Book Breakdown • Freight: Rs. 8,600 crores. • Passenger Rolling Stock: Rs. 1,176 crores. • Shipbuilding and Defence: Rs. 341 crores.
Vande Bharat and Market Position • Tender Status: Ongoing, with unique facilities for aluminum and stainless steel coaches. • Rail Wheel Sets: Planning for future needs despite occasional pressures.
Italian Operations • Firema Financials: Clean standalone financials; net debt at Rs. 333 crores. • Restructuring: Expected to improve performance as legacy contracts conclude.
Passenger Rolling Segment • Order Book: Approximately Rs. 1,100 crores, with execution timelines of 2.5 to 3 years. • Vande Bharat Market Potential: Estimated at Rs. 72,000 crores.
Future Orders and Production • Rolling Stock Orders: New tenders expected between April and October. • Freight Wagons Requirement: 30,000 needed annually to meet 2030 targets.
Conclusion • Management Commitment: Focus on growth and operational expansion, with positive outlook on future demand and capacity.