Titagarh Rail Systems Ltd Q1 FY27 Earnings Analysis

- Passenger business expected to grow significantly, targeting 200 cars production in FY27 up from 63 in FY26; full ramp-up by 2028 with continuous growth to FY30. - Freight business to remain steady with cruising altitude production between 600 to 1,000 wagons per month depending on order cycle. - Overall order book stands at INR 27,540 crores, with passenger segment around INR 10,600 crores and freight at INR 3,100 crores. - Wheels JV to start production in June 2026 with a contract of 80,000 wheels per annum for 20 years. - Wagon leasing business to grow gradually as an extension of product offering, targeting safe clients, but exact scale unknown. - Strategic plan envisions passenger segment revenues rising sharply, supported by new metro train projects and Vande Bharat coach deliveries from FY27 onwards. - Freight segment margins stable at ~12%, passenger segment margins expected to improve with backward integration over next few years.

- Passenger business expected to grow significantly, with order book proportion 70%-80%, targeting full production ramp-up by FY30. - Freight business is steady-state with stable margins around 11%-12%, not expected to see major growth but sustained profitability. - Passenger rail system margins anticipated to reach freight business levels (~12%) as backward integration and volume ramp-up happen. - Free cash flow was INR 380 crores in FY26, indicating healthy cash generation capacity. - Production capacity for passenger vehicles to ramp up sharply from 63 cars to 200 cars in FY27. - Naval shipbuilding business (Titagarh Naval Systems) is new growth area with production starting within current financial year. - Long-term growth aligns with India’s economic expansion and corresponding increase in rail wagon demand. - No specific forward earnings or EPS guidance provided, but strategic plans show scaling passenger business and leveraging operating leverage to improve profitability.

- Titagarh Naval Systems Limited (TNSL) has a identified total project cost of approximately INR 610 crores. - The company has received approval for a 25% capital subsidy under the Capital Shipbuilding Scheme by the Government of India for this project. - The balance of the capex will be funded through a mix of debt and equity in TNSL. - TNSL is set up as a separate company to attract strategic financial investors, limiting equity outflow from the parent (Titagarh Rail Systems). - There is potential for a future separate listing of TNSL once the business stabilizes. - Land for the project has been acquired, the jetty is in place, and construction work is set to begin soon. - The company has also made significant capital investment in importing machinery to manufacture aluminium coaches domestically, achieving full self-sufficiency anticipated by FY28.

- For the INR 610 crores project in Titagarh Naval Systems Limited (TNSL), funding will be via a mix of debt and equity. - The government of India has approved a 25% capital subsidy under the capital shipbuilding scheme for this project. - The company plans to limit equity outflow from the parent (Titagarh Rail Systems) by looking for strategic financial investors in TNSL. - There is a possibility of a future separate listing of the naval business once stabilized. - No specific mention of any current or upcoming fundraising through debt or equity outside of this naval project funding plan was noted in the provided text.

- Total order book: Approximately INR 27,544 crores (includes 49% share of the wheel joint venture). - Pending metro coaches: About 522 units yet to be delivered. - Pending Vande Bharat coaches: Approximately 1,280 units yet to be delivered. - Total pending wagons orders: Around 6,500 wagons. - Production in Q4 FY26: Approximately 1,700 wagons produced. - Repeat Pune Metro order: 12 trains to be delivered within 2 years. - Gujarat Metro: 34 trains (102 cars) expected to complete within FY27 or with minor spillover. - Mumbai Metro: Supply starting in FY27, execution over next 2 years. - Leasing business: Currently includes 2 rakes; expected calibrated growth with selective safe clients. - Wheel joint venture: Contract for 80,000 wheels per annum for 20 years, production starting June 2026.