Titagarh Rail Systems Ltd Q4 FY26 Earnings Analysis

- FY'27 and FY'28 are expected to be important, exciting years with significant ramp-up in Passenger Rail Systems production. - Wagon demand is anticipated to remain strong in the midterm, aligned with Indian Railways' aim to carry 3 billion tons of freight by 2030. - Freight wagon production capacity is set for 1,000 wagons per month, with current orders covering workload till first half of FY'27. - Passenger Rail Systems have the potential to overtake freight business in revenue within a few years. - Multiple new orders and tenders are being pursued, including metros (Mumbai Line 5 & 6) and potential MRVC tenders. - Capacities are being enhanced alongside order book growth to capture these opportunities. - Backlog for metro projects (e.g., CRRC Bangalore) expected to clear mostly by FY'27. - Production ramp-up visible; metro car target nearing 100-120 by FY'26. - New business lines like wagon leasing and defence/shipbuilding segments are under evaluation and expected to contribute in the medium term.

- FY'27 and FY'28 are expected to be very important and exciting years for Passenger Rail Systems with significant production ramp-up. - Passenger Rail Systems business is projected to substantially overtake Freight Rail Systems in size over the coming years. - Freight wagon margins are stable around 11-12.5%, while Passenger Systems EBITDA margin is currently ~11-12%, with a target to reach ~15% EBITDA margin in 2 years through backward integration and propulsion capabilities. - Production ramp-up in Passenger segment (metros, Vande Bharat, propulsion) will drive growth. - Freight wagon demand expected to remain healthy long-term, following logistics and locomotive growth, with production capacity at ~1,000 wagons/month ready. - New orders expected for both Passenger and Freight segments, with strategic capex planned to support growth, funded through equity, internal accruals, and debt. - Overall, growth in top line and margins is expected driven by Passenger Rail ramp-up and stable Freight demand.

- Planned overall capex for Passenger Rail Systems is about INR 1,000 crores, aimed at capacity expansion. - Capex for FY'27 will be within this amount, funded through a mix of equity raise, internal accruals, and debt. - No new capital requirement presently, except for further expansions for large projects like high-speed trains or MRVC tenders. - Expansion work, including aluminum coach facilities and a 1.6 km test track for high-speed trains, is underway and expected to complete by H1 FY'27. - Production for Vande Bharat trains has started; capex related to this is included in current plans. - Evaluation ongoing for participation in MRVC tenders; capex and partnerships will be decided post tender finalization. - Plans to build up shipbuilding and defense business with possible future strategic investments; details pending Board committee decisions. - Wagon leasing business to be integrated within existing company, no separate capex detailed yet.

- For FY'27, the planned capex for Passenger Rail Systems is within the existing announced amount of INR 1,000 crores. - Funding for this capex comes partly from earlier equity raises, internal accruals, and debt. - No new capital requirements are anticipated unless there are additional expansions for new large projects like high-speed trains or MRVC. - New fundraising through debt or equity will be considered only if new projects are successfully won. - Currently, no speculation or concrete plans for fresh fundraising have been made. - Management remains open to all options but will provide financial estimates only after winning projects.

- Total order book stands around INR 27,755 crores. - Freight wagons order book: 3,126 wagons (exact monthly loading not disclosed). - Orders for metros: Approximately INR 4,000 crores booked in the last 6 months (Mumbai Metro Lines 5 & 6). - CRRC Bangalore Metro backlog expected to be completed mostly by FY '27, with possible spillover of 1-1.5 months into FY '28. - Production ramp-up planned for FY '27 and FY '28, especially in Passenger Rail Systems. - Existing orders can be catered to with ongoing capex (INR 1,000 crores planned for Passenger Rail Systems), with no new capital required unless new large projects like MRVC or high-speed trains are won. - Freight wagon orders cover workload until about first half of FY '27; new tenders expected in early part of next financial year.