This article first appeared on GuruFocus .
-
Revenue from Operations:INR 753 crores, impacted by lower execution in the freight car and infrastructure divisions.
-
EBITDA:INR 81 crores, with a margin of 10.8%, remaining in line with the corresponding quarter of the previous year despite lower revenues.
-
Profit Before Tax (PBT):Increased by 4.8% year-on-year to INR 44 crores, with a margin improvement of 1.23% to 5.9%.
-
Profit After Tax (PAT):Increased by 85.9% year-on-year to INR 52 crores, translating to a PAT margin of 6.9%, an improvement of 381 basis points year-on-year.
-
Finance Costs:Declined by 18.2% year-on-year and 17% sequentially.
-
Electrical Infrastructure (Bright Power) Revenue:Increased 76.8% year-on-year to INR 175 crores.
-
Electrical Infrastructure EBIT Margin:Improved to 10.8%, representing an expansion of 150 basis points year-on-year.
-
Infrastructure (Rail & Green) EBIT Margin:Reported a positive EBIT margin of 1.4%, compared to an EBIT loss in the corresponding quarter last year.
-
Freight Car Deliveries:1,054 cars delivered during the quarter.
-
Foundry Production:5,148 tons produced during the quarter.
-
Order Book:Standing at INR 9,923 crores as of June 30, 2026.
-
Order Book Mix:Share of private sector and export orders increased to 96.4% in Q1 FY27, up from 21% in FY25 and 79% in FY26.
-
Warning! GuruFocus has detected 7 Warning Signs with BOM:533326.
-
Is BOM:533326 fairly valued? Test your thesis with our free DCF calculator.
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
EBITDA margin improved to 10.8% despite lower revenues, reflecting strong cost optimization and margin improvement initiatives.
-
Infrastructure business turned around with a positive EBIT margin of 1.4% compared to an EBIT loss in the same quarter last year.
-
Bright Power (electrical infra) revenue surged 76.8% YoY, with EBIT margin expanding 150 basis points to 10.8%.
-
PAT increased 85.9% YoY to INR 52 crores, with PAT margin improving by 381 basis points to 6.9%.
-
Order book strengthened to INR 9,923 crores, with private and export orders now comprising 96.4% of the freight car order book, diversifying revenue sources.
-
Finance costs declined 18.2% YoY and 17% sequentially, supporting profit growth.
-
Strategic JV with Trinity Rail enhances leasing capabilities, aiming to increase market share from 15% to 50%.
-
New orders include a significant South African contract (INR 4,100 crores) for wagons and maintenance, expanding international footprint.
-
Management expects continued revenue growth of 20-50% annually from new business initiatives, with EBITDA margin improvement of 1.2-3% over the next few years.
Negative Points
-
Standalone revenue declined due to lower execution in freight car and infrastructure divisions, impacted by supply chain disruptions.
-
Freight car production volume was lower at 1,054 units, partly due to high oil and gas prices affecting supply chain.
-
Other expenses increased due to freight charges on export orders, impacting cost structure.
-
The South African order execution is expected to begin only in FY28, with 50% of revenue deferred to the next financial year.
-
Management refrained from providing specific revenue or margin guidance for FY27, citing uncertainty.
-
Dependence on rail wheel factory supply for wheelsets remains a potential risk, though current stock is adequate.
-
The company is still in a transitional phase, with a qualitative shift in product mix that may affect volume-based growth expectations.
Q & A Highlights
Q: What is the detailed roadmap for new growth engines like coverage, signaling, renewable energy, and the leasing platform, including capital allocation and expected returns? A: Sudipta Mukherjee (Managing Director) stated that while the detailed strategy cannot be discussed on a call, the company is focused on strengthening its core mechanical and metallurgy engineering business while building capabilities in electrical and electronics through businesses like Bright Power. He emphasized that Texmaco carefully chooses its path, invests in the right people, and avoids superficial ventures. Regarding leasing, the company aims to increase its market share from 15% to 50%, currently operating around 35 Rakes through leasing and ready to invest in about 100 Rakes per month in the near term. Indrajit Mookerjee (Executive Vice Chairman) added that the leasing company is a JV where Texmaco's stake will be 34% after Trinity Rail's entry, and capital allocation will primarily be in the core business and defense, with no major capital allocations expected for the new areas.
Q: Is the news about the JV potentially investing about INR 1,800 crore over the next three to five years to lease about 100 trains correct? Also, is the news about establishing a locomotive and wagon manufacturing plant in South Africa with an investment of INR 200-300 crore accurate? A: Sudipta Mukherjee (Managing Director) confirmed the leasing investment figure is broadly correct. Regarding South Africa, he could not confirm the exact numbers as they are subject to change, but confirmed the company is looking at setting up facilities to meet localization requirements and support its export business for wagons and locomotives. Indrajit Mookerjee (Executive Vice Chairman) added that establishing a footprint in South Africa is more important than the investment amount, as it is a path-breaking move for an Indian company to do business sustainably in a developed market.
Q: With 96% of the order book now from private and export orders, are there any execution challenges? Also, what is the revenue growth target for FY27? A: Sudipta Mukherjee (Managing Director) said there are no execution challenges, though the first quarter saw supply chain stress due to high oil and gas prices affecting the industry. Despite this, the company's focus on cost reduction and operational control improved profitability, and output is expected to improve from the coming quarters. He declined to give a specific volume target, emphasizing a qualitative shift towards specialized wagons rather than commodity wagons. He reiterated that the company expects to do better than previous years in terms of growth and bottom-line improvement.
Q: Can you provide a breakdown of the INR 4,100 crore South African order between wagons, locomotives, and maintenance, and the expected revenue recognition timeline? A: Sudipta Mukherjee (Managing Director) clarified that the announced order value only includes wagon pricing and long-term maintenance (15 years, accounting for 30-35% of the value). The locomotive portion is a separate mandate under process, and the value will be additional once finalized with a suitable partner. He expects around 50% of the wagon order revenue to be recognized in the next financial year (FY28), with the balance spread over time.
Q: What is the reason for the increase in other expenses this quarter? A: Sudipta Mukherjee (Managing Director) explained that the increase is due to the higher share of export orders. For export wagons, freight charges are paid by the company and recorded under other expenses, while the corresponding income is included in total revenue, leading to an increase in the expense line.
Q: What is the current pending wagon order book, and does it include the South African order? A: Sudipta Mukherjee (Managing Director) confirmed the company has orders for more than 6,000 wagons, which includes the South African order. He also mentioned other export orders, such as one from Cameroon, are being executed.
Q: What is the margin outlook given the shift in the order book from Indian Railways to private and export orders? A: Sudipta Mukherjee (Managing Director) reiterated the company's focus on improving margins, noting the results demonstrate this commitment. He stated the company aims to sustain and continuously improve margins, with a long-term trajectory shared in its vision, but declined to give a specific figure, emphasizing it is a journey towards positivity.
Q: What is the roadmap for 2030, and how does the company plan to enter the metro and Vande Bharat segments? A: Sudipta Mukherjee (Managing Director) stated the Vision 2030 roadmap aims to double the top-line to around INR 10,000-12,000 crore by adding new businesses while improving the bottom line. Indrajit Mookerjee (Executive Vice Chairman) added a macroeconomic view, citing the National Rail Plan's goal to increase rail transport share from 27% to 45% by 2030, which will drive demand for wagons, track, and signaling. Regarding metro and Vande Bharat, the company is actively working to enter profitably, having already made a firm entry through its company that makes Vande Bharat interiors.
Q: What is the execution timeline for the INR 5,200 crore orders won this quarter, and how much will be executed in FY27? A: Sudipta Mukherjee (Managing Director) clarified that the INR 5,200 crore figure includes the South African order of around INR 4,100 crore, which is executable in the next financial year (FY28). Preparation work, such as prototypes, will start this year. The maintenance portion (30-35% of the value) is long-term. Other export orders are under execution, and some are expected to come soon.
Q: What is the revenue and EBITDA guidance for FY27 and FY28? A: Sudipta Mukherjee (Managing Director) stated that new initiatives should start paying off, with a strong focus on the bottom line and a journey towards mid-teen EBITDA margins. The target is to improve EBITDA by 1.2% to 3% in the next 1-3 years. He indicated a potential 20% to 50% growth in top-line annually, driven by new businesses, but declined to give an absolute figure, emphasizing the upward trajectory.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
