Mumbai: Railway wagon maker Titagarh Wagons, whose revenues come mostly from Indian Railways, hopes to earn more from private players on a surge in new orders, a top official said.
“Most of the private companies had deferred their buying decisions. And now, with the economy looking up ... the offtake has started increasing and it will have a spiralling effect,” vice chairman Umesh Chowdhary told Reuters over the weekend.
“Revenues from private sector is down to 20-30% in the current year from almost 80% a couple of years ago. So there is a lot of potential,” he added.
Titagarh Wagons, which also makes heavy earth-moving and mining equipment, hopes to increase market share in India to 30-35% from about 18 % now, upping capacity at Cimmco Birla, a sick unit it jointly controls with the SK Birla Group.
Cimmco, maker of similar products, is co-promoted by Titagarh and the SK Birla group through a equal joint venture (JV) signed last year. The JV is infusing funds to revive Cimmco under a scheme filed with the Board for Industrial & Financial Reconstruction.
Titagarh Wagons is expecting to double capacity to more than 7,000 wagons annually after Cimmco becomes operational.
“As the private wagon offtake increases, it will definitely impact our revenues because with the combined capacity of Cimmco and Titagarh, we would look at filling up our shops.”
Titagarh, which sells bulk of its wagons to Indian Railways, has submitted two tenders for about 24,000 wagons in all, and expects them to be finalised shortly, Chowdhary said.
The Indian Railways had registered 9% revenue increase in April-November and this could result in an increased spending towards equipment and wagons.
It got orders for 1,800 wagons from the Railways this fiscal year to March, he said.
“The next big tenders are under finalisation. There is a tender already open for about 18,000 wagons and there is another under finalisation for 6,000 wagons”.
It has also jointly bid with ABB Ltd to make railway equipment, he added.
“It’s a bid we have put in now, whether we convert it into a JV or consortium has to be seen,” Chowdhary said, declining to disclose the value.
Titagarh’s JV with US-based FreightCar America to make aluminium rail cars — lighter wagons with more pay load — for the local market is yet to start production.
“It’s at a design stage, this is a new concept we are introducing to the market. When you have to sell a concept to the system, there are a lot of apprehensions. Nobody wants to disturb the applecart.”
At 1:04 p.m., Titagarh Wagons shares were up 1.64 percent at Rs471.1in a Mumbai market down 0.63%.