💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew 55% YoY in FY24 to INR 3,503.78 Cr and further increased 45.7% to INR 5,106.57 Cr in FY25. The Infra-Electrical division saw segmental profits grow 85.8% from INR 23.92 Cr in FY24 to INR 44.44 Cr in FY25. Conversely, the Infra-Rail & Green Energy division reported a loss of INR 29.09 Cr in FY25 compared to a loss of INR 5.90 Cr in FY24.

Geographic Revenue Split

Primarily domestic-focused with significant revenue from Indian Railways; however, the company is targeting a 300-500% (3x to 5x) growth in export business over the next 2-3 years to diversify beyond the Indian market.

Profitability Margins

Operating profitability (PBILDT margin) improved significantly to 9.82% in H1FY25 compared to 6.66% in H1FY24. PAT increased from INR 25.80 Cr in FY23 to INR 112.98 Cr in FY24, representing a 337.9% increase.

EBITDA Margin

PBILDT margin improved to 9.82% in H1FY25. The company faces a negative rating trigger if the PBILDT margin falls below 7% on a sustained basis.

Capital Expenditure

The company utilized INR 1,050 Cr from QIP and preferential issues in FY24 for debt reduction and working capital. A term loan was also taken for debottlenecking the heavy engineering and steel foundry divisions. Acquisition of TWRL cost approximately INR 614 Cr.

Credit Rating & Borrowing

Long-term bank facilities rated CARE A; Stable (upgraded from CARE A-). Short-term facilities rated CARE A1. Borrowing costs are influenced by the Total Debt/PBILDT ratio, which improved from 10.39x in FY23 to 4.13x in FY24 and below 3.5x by Sept 2024.

⚙️ Operational Drivers

Raw Materials

Steel, cartridge tapered roller bearings (CTRB), and wheel sets are the primary raw materials. These represent the bulk of the manufacturing cost for wagons.

Import Sources

The company imports wheel sets specifically to meet orders from private parties. Specific countries are not disclosed, but global sourcing is utilized for specialized components.

Key Suppliers

Procurement is restricted to Research Design and Standards Organisation (RDSO) approved vendors for critical components like steel and bearings.

Capacity Expansion

Current installed capacity includes 10,000 Vehicular Units (VUs) of wagons, 20,400 MTPA of structurals, 10,000 MTPA of bridges, and 42,000 MTPA of steel castings. The acquisition of TWRL added 3,000 VUs of capacity, bringing total wagon capacity to 13,000 VUs.

Raw Material Costs

Raw material costs are subject to high volatility; however, risk is mitigated by escalation clauses in long-term Indian Railways contracts. Short-term private orders (1-2 months) remain exposed to price fluctuations.

Manufacturing Efficiency

The company is focusing on debottlenecking its heavy engineering and steel foundry divisions to improve throughput and support the 55% growth in TOI.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

300-500%

Growth Strategy

Growth is driven by the acquisition of TWRL for INR 614 Cr to capture private sector wagon demand, a planned demerger of the loss-making 'Infra-Rail & Green Energy' division to lean out the balance sheet, and a 3x-5x target for export expansion. The company is also leveraging a healthy order book from Indian Railways' INR 2.55 lakh Cr budgetary allocation.

Products & Services

Railway freight cars (wagons), hydro-mechanical equipment, industrial structurals, steel castings, loco shells, electrical mechanical units (EMU), railway bridges, and pressure vessels.

Brand Portfolio

Texmaco, TexRail, Adventz Group (parent group), and Texmaco West Rail Limited (TWRL).

New Products/Services

Expansion into commodity-specific wagons for private sector players following the TWRL acquisition.

Market Expansion

Diversifying from government-only contracts to private sector players and international markets (targeting 3x-5x export growth).

Market Share & Ranking

Largest wagon manufacturer in India with a total capacity of 13,000 VUs.

Strategic Alliances

Acquired 100% stake in Texmaco West Rail Limited (formerly Jindal Rail Infrastructure Limited) for INR 614 Cr. Merged BPPPL and Texmaco Hi-Tech to form the Infra-Electrical division.

🌍 External Factors

Industry Trends

The industry is seeing a major thrust from the GoI in railway infrastructure, shifting toward higher-capacity wagons and electrification. TexRail is positioned as the market leader to capture this volume growth.

Competitive Landscape

Faces stiff competition from other established wagon manufacturers and larger EPC players in the rail infrastructure segment.

Competitive Moat

Moat is built on being the largest domestic manufacturer with significant backward integration (steel foundry) and a long-standing relationship with Indian Railways. This is sustainable due to high entry barriers in RDSO-certified manufacturing.

Macro Economic Sensitivity

Highly sensitive to Government of India (GoI) budgetary allocations for railways, which increased to INR 2.55 lakh Cr for FY25.

Consumer Behavior

Shift in private sector demand toward commodity-specific wagons for efficient freight movement.

Geopolitical Risks

Global situations impact the foundry business and export targets, though management indicates the portfolio is diversified enough to withstand short-term shocks.

⚖️ Regulatory & Governance

Industry Regulations

Operations are strictly governed by RDSO standards for manufacturing and vendor approvals. The company must comply with NCLT orders for mergers and demergers.

Environmental Compliance

The company publishes a Business Responsibility & Sustainability Report (BRSR) as per Listing Regulations.

Taxation Policy Impact

Not disclosed as a specific percentage.

Legal Contingencies

The company is in the process of filing claims for slow-moving/stuck receivables in the Infra-Rail division, which totaled INR 689 Cr in unbilled revenue as of March 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline and impact of the demerger of the 'Infra-Rail & Green Energy' division and the realization of INR 689 Cr in unbilled revenue.

Geographic Concentration Risk

High concentration in India, specifically projects linked to Indian Railways, though manufacturing is centralized in West Bengal across four facilities.

Third Party Dependencies

High dependency on RDSO-approved vendors for critical components like bearings and wheel sets.

Technology Obsolescence Risk

The company is upgrading its heavy engineering division to maintain manufacturing efficiency against modern standards.

Credit & Counterparty Risk

Significant credit risk associated with slow-moving receivables from government infrastructure projects, with total debtors reaching INR 1,146 Cr in FY25.