Financial Performance Highlights

  • Total Income for FY26: INR101 crores, representing 44% year-over-year growth
  • PAT for FY26: INR25 crores, representing 53% year-over-year growth
  • Cash Flow: Positive cash flow reported for the period
  • Tax Rate: Company pays 15% plus 2.5% cess (total 17.5%) under a government scheme for companies incorporated between 2020-2024, compared to 25% for other companies
  • Other Income: Increased significantly due to interest from FDRs maintained from IPO proceeds

Operational Updates

New Manufacturing Facility:

  • Bogie manufacturing plant is operational as of June 2026
  • First invoices expected to be raised in June 2026
  • RDSO approval process ongoing for direct supply to railways
  • Plant capable of manufacturing products up to 1,000 kg
  • Samples developed for coupler, yoke support, and other products

Capacity and Revenue Potential:

  • Old plant capacity: INR110 crores revenue potential
  • New plant capacity: INR200 crores revenue potential
  • Combined peak revenue potential: INR340-350 crores
  • Track section currently contributing approximately INR20 crores, expected to grow to INR60-70 crores in two years

Product Development:

  • 25 RDSO-certified products currently
  • 15-20 additional products in pipeline for RDSO approval
  • Approval timeline: 3-7 months per product
  • Products span wagon, coach, and track segments

Order Book and Guidance

Current Order Book:

  • INR140-150 crores as of June 2026
  • Executable within FY27
  • Composition: 20-30% from track, 40% from coach, remainder from wagon segments
  • 40% of sales directly to government, 60% to private players

FY27 Guidance:

  • Revenue: INR210-220 crores
  • PAT Margin: 25% target maintained
  • H2 expected to be stronger than H1 due to new plant ramp-up

Long-term Outlook:

  • FY28 revenue expectation: approximately INR350 crores
  • 3-year vision: complete wagon manufacturing capability targeting 200 wagons annually

Capital Structure and Financing

IPO Proceeds Utilization:

  • INR50 crores raised from IPO used for bogie manufacturing facility capex
  • INR10 crores remaining funds utilized in current financial year

Warrants Issuance:

  • INR29 crores raised through warrants
  • Purpose: Working capital for track section expansion
  • Expected utilization within 1.5-2 years
  • Rationale: Maintain debt-free status and minimize costs

Capex Plans:

  • Focus on harvesting returns from existing capex in FY27
  • Future expansion from internal accruals
  • Brownfield expansion possible with available land
  • Targeting complete assembly lines for rubber and springs

Market and Industry Context

Demand Environment:

  • Temporary slowdown in wagon industry, but recovering with new 1 lakh wagon order
  • Strong potential in coach and track segments
  • Government focus on railway infrastructure continuing

Competitive Position:

  • High entry barriers due to RDSO approval process and critical safety components
  • Limited competitors (4-7 active clients per product)
  • Unlisted competitors include Frontera, Roys Steel, and Atul Engineering
  • Advantages: Tax benefits, strategic location, debt-free status

Margin Sustainability:

  • Price variation clauses help maintain margins despite raw material cost increases
  • Diversification into higher margin products (mining, power sector components)
  • Focus on reducing all operational costs

Receivables Management

  • Receivables increased in March due to railway funding cycle (year-end exhaustion)
  • Approximately 50% of INR32 crore March receivables collected by April 15
  • Expected normalization to historical averages in FY27
  • Difference in receivable cycles between government and private clients

Future Expansion Plans

Market Diversification:

  • Targeting mining sector components
  • Exploring thermal power plant components
  • Export potential targeted for FY28 to US/UK markets

Product Development:

  • Complete assembly lines for railway components
  • Precision engineering for export markets
  • Leasing and maintenance services for railway products

Management Participants

  • Mr. Himanshu Lohia - Managing Director and Chief Financial Officer
  • Mr. Subodh Lohia - Whole-Time Director
  • Ms. Saundarya Lohia - Non-Executive Director
  • Moderator: Mr. Karan Thakur - Kirin Advisors Private Limited