Titagarh Rail Systems Ltd. is also looking forward to an annual revenue of around Rs 8,500 crore from the passenger trains segment on enhanced wagon production capacity, according to Managing Director Umesh Chowdhary.
"What we are doing is the capacity of 1,000 wagons per month gives us a potential revenue between Rs 4,000–4,500 crore a year," he told NDTV Profit in a conversation on Tuesday. "The passenger train, we are setting up capacity for about 850 cars."
"Each car is about Rs 10 crore. So, that gives us a capacity of going up to Rs 8,500 crore a year, what would also result in a doubling of revenue,” Chowdhary said.
However, he cautiously noted that achieving this target depends on a steady flow of orders and successful execution. "That is something that time will tell. Of course, our target would be to optimise the capacity utilisation as we go along."
The company has also raised its production capabilities through a foundry expansion. It is set to commence operations between July and August. It will help increase the manufacturing of bogies and couplers.
The margins in the freight wagon business will be sustained at 12%. "It's a competitive landscape. So in order to keep our leadership position in the business, we will have to continue to pass on the benefits to some extent to the railway," Chowdhary added.
Beyond its core rail operations, Titagarh Rail is revisiting its ambitions in shipbuilding, a sector Chowdhary described as "very hot". The top executive emphasised that the company has been in this business for about eight years and has "all the credentials under our belt".
The shipbuilding business had previously been put on the "backburner" to focus on setting up its passenger rail division.
With the passenger rail business now established, Chowdhary confirmed that management now has the bandwidth to pursue shipbuilding as "another engine of growth for the group".
A significant hurdle has been cleared with the acquisition of land in Falta, West Bengal, which removes previous air draft constraints, as a result of which "we can actually do several kinds of vessels for the Indian Navy and for other customers as well", the managing director said.
Chowdhary dismissed any suggestions of a slowdown in government support for the railway sector. He positioned investment in railways and waterways as essential for India's ambition to become the world's third-largest economy by tackling the high cost of logistics.
Regarding wheelset-availability issues that plagued the company since Q3 of the last financial year, the MD confirmed that the situation is stabilising. The shortage impacted Q1 performance, but with a return to normalcy, the company is confident in meeting its production targets.
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