In the last six-nine months, the industry has faced many challenges including wheelset supply issues and delay in fresh orders. Titagarh Rail Systems expects passenger cars manufacturing capacity to reach 20 cars/month in FY26 and 40 cars/month in FY27. However, due to increased contribution from low margin PRS, the company’s margin profile would remain under pressure.
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Systematix Report
Titagarh Rail Systems Ltd.'s Q4 FY25 results fell short of expectation on account of lower wagon production and margin contraction. The company reported consolidated revenue of Rs 10.1 billion in Q4 FY25, down 4.5% YoY (+11.5% QoQ), driven by weaker freight rail system exection partially offset by strong revenue from passenger rail system segment.
FRS revenue stood at Rs 9.2 billion (down 10% YoY/up 7.3% QoQ), attributable to continued supply chain constraints related to wheelsets from IR. In contrast, PRS segment exhibited robust momentum, with revenue of Rs 903 milliion (+154% YoY/82.9% QoQ), albeit on a low base.
Gross profit margin expanded to 25.8% up 255.7 bps YoY/202.1 bps QoQ. Ebitda for the quarter stood at Rs 1.02 billion, down 15.3% YoY/up 1.6% QoQ resulting in Ebitda margin of 10.1%, lowest level in last eight quarters due to higher other expenses. Segmental Ebit for FRS/PRS came in at Rs 1.1 billion (down 15.9% YoY/5.7% QoQ) and Rs 33 million (up 377% YoY/-28.3% QoQ) resulting in FRS/PRS Ebit margin of 11.8%/3.7%.
Despite a significant increase in other income (+103.5% YoY/6.3% QoQ) it was insufficient to offset the operational headwinds, as PAT slumped 18.4% YoY/marginally up QoQ to Rs 645 million.
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