Our wagon orderbook is strong, says Umesh Chaudhary of Titagarh Wagons

Umesh Chaudhary, vice chairman & managing director, Titagarh Wagons, in an interview with Swati Khandelwal of Zee Business, talks about the slowdown in order in wagon segment, expectations from international/overseas subsidiaries and opportunities in the Metro projects. 

There was a slowdown in wagon order inflow last year. Can you see any pick-up in demand from Indian Railways and private sector? 

Yes, but not just in last one year as our order book has been under stress for the last 4-6 years. In 2010-11, our total output was around 4,000-4,500 wagons, which has gone down to 400-500 wagons due to an absence of orders from both the Indian Railways and the private players. However, the demand from both are picking up. Railways has invested a lot in capacity creation, track capacity creation, signalling and moto-locomotives and it is a time to utilise those capacities, and that can be achieved by adding wagons. I feel that wagons will be in demand in the next 3-4 years, and this will bring a pick-up in dedicated freight corridor wagons. I can see healthy demand in the recent future. 

What is your outlook growth for this year? Also provide, profit and sales target for the FY20?

There was an improvement in our first six-months standalone results when compared to the same period of the previous year. I feel a healthy trend can be seen in the order book that is available with us and their execution. On the front of an overseas subsidiary, our French unit will turn up to be a profitable one by 2019-20 and the Italian unit will take one more year in becoming a profitable unit. 

Last month you were awarded a contract of 5,058 wagons. What is the execution timeline for the first tranche?

The contract will be executed in two tranches. The first one-third quantity of the contract will be executed in the first six months and the remaining part will be completed before March 2020. So, we will start working on it in this quarter and its maximum revenues can be seen in our books in FY20. 

What is the current order book in Railways and Metro segment? Can we expect new orders from Indian Railways in the next few months? 

We have a huge order-book in the wagon segment, and Titagarh Wagons's capacity is fully booked. When it comes to our subsidiary, Cimco, then Railways has to buy 10,000-12,000 wagons from the facility. In addition, there is a surge in demand from the private sector and will concentrate on it to fill the capacity limits of Cimco. Metro is a different business vertical for us, and our Italian subsidiary has helped us in participating in the tenders of Indian Metro. We have qualified in the tenders on the ground of technology and eligibility. So we have participated in Mumbai and Nagpur Metro and will be participating in the upcoming metro projects of the country. 

Are you expecting near term orders in defence and shipbuilding segments?

We don't have any big defence deal at present, but have participated in several tenders and are waiting for the decisions, which can be announced before or after the elections. In the case of shipbuilding, we had four ship orders, two from Navy and National Institute of Ocean Technology (NIOT) each. Interestingly, three ships have been launched before the schedule. The last ship launched by us belonged to NIOT and it was launched three months before the schedule. I feel that we are concentrating specifically on specialised vessels. The number of reliable players in shipbuilding has gone down, but we have demonstrated ourselves as a reliable player by launching three ships before the schedule. We can be a reliable player from the private sector for ministry of defence as well as science and technology. I feel that we will be a preferred supplier for future requirements.