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Showing posts with label Titagarh Wagons. Show all posts
Showing posts with label Titagarh Wagons. Show all posts

Friday, 3 June 2016

14:27

Titagarh Wagons forms JV with French firm ‘Matiere’ to make & sell Metallic Bridges

Titagarh Wagons forms JV with French firm ‘Matiere’ to make & sell Metallic Bridges

Kolkata: Titagarh Wagons Ltd has formed a joint venture with France’s Matiere SAS for manufacturing metallic and modular bridges in India. The duo plans to form a 50:50 joint venture in India.

“The Board of Directors of the Company at its meeting held on May 26, 2016 has approved execution of a joint venture agreement (JVA) with Matiere SAS, France pursuant where to a joint venture company between the joint venture partners would be incorporated in India to pursue manufacture of metallic and modular bridges in India,” said Titagarh Wagons in a BSE filing on May 27, 2016. The JV will also market its products in the neighbouring territories.

Speaking to media persons after the company’s board meeting, Titagarh Wagons vice chairman and MD Umesh Chowdhary said this business will be in addition to the manufacture of Bailey bridges that the company has been engaged in. “We are aggressively pursuing more orders for all segments of railroad rolling stock which will not only enable us to achieve the desired growth but also consolidate presence in the overseas markets,” he added.

Titagarh Wagons Limited already has an existing business of manufacture and sale of bailey bridges – portable prefabricated truss-bridges, initially designed for use by military engineering units to bridge gaps up to 200 feet in a single span. Being modular in design, bailey bridges can be supplied in completely knocked down (CKD) or semi-knocked down (SKD) conditions, thereby facilitating easy logistics, mobility and assembly with minimal aid from heavy equipment. Titagarh Wagons Limited is the only company in the private sector with necessary license for manufacturing bailey bridges in India.

The company, one of the largest private sector manufacturer of railway coaches (EMUs, MEMUs) with more than 39 per cent market share, is confident of wagon orders improving on the back of government’s investment focus on railways. Currently, they have received an order for around 2,118 wagons from Indianrailways valued Rs 302.46 crore. The total order book of the groat up currently stands at Rs 2,700 crore.

Titagarh Wagons has reported a consolidated net loss of Rs 20.2 crore in the fourth-quarter (Q4) ended March 31, which includes an exceptional loss of Rs 19.5 crore compared to a net profit of Rs 7.6 crore in the corresponding quarter previous year. The total income in the said quarter was up at Rs 316.5 crore Rs 237.8 crore while other income during the quarter under review surged to Rs 11.6 crore Rs 4.5 crore. EBITDA in Q4 stood at Rs Rs 17.6 crore Rs 22.7 crore and EBITDA margin at 7.2 per cent (7.4 per cent). Company officials claim the group achi Rs 959 crore with the French eved a turnover of subsidiary recording sales of euro 47.28 million and Italian subsidiary Titagarh Fireman Adler SPA (TFA) euro 33.45 million.

Source:RailNews
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Thursday, 2 July 2015

07:27

Predatory Pricing in Tenders a Worrisome Trend in India’s fast growing Rail Business: Dolat Capital

Predatory Pricing in Tenders a Worrisome Trend in India’s fast growing Rail Business: Dolat Capital


With the Indian Railways looking to overhaul its networks, analysts see greater business emerging in Infrastructure, Communications, Rolling Stock, Safety, Services & Products. However the trends to win the Bids by certain OEMs encountered by the nominated members of the Tender Committee Proceedings were aghast on the pattern, however to remain lip locked due to the framework and the rules

In a tender for 2015-16 in which Technical and Financial Bids were opened, the L1 price quoted by one large but new company for BOXNHL Wagon was Rs.10.80 Lakh, whereas the aggregate cost of materials alone for the said wagon is around Rs.13 Lakh. Adding to it the conversion cost including labour, consumables, power, finance charges, and other overheads, the cost (without profit) would be substantially higher.  The department has just come out with one order, but in an unprecedented development, almost all the major wagon makers have refused to produce the wagons for the price quoted by L1 manufacturer. The industry has described the price as predatory as it is even below cost of material.

As a consequence, the Railways, against a total tender volume of 8,509 wagons, has just issued order to only one wagon maker for 1871 wagons. The price quoted by the bidder and accepted by the Railways with respect to the order for wagons of type BOXNHL is Rs 10.80 lakh a piece, lower than previous year’s price of Rs 11.74 lakh. The realistic price should have been not less than Rs 13 lakh, the industry has told the ministry.

“It is an existential crisis for the whole industry. Despite repeated pleas, the Railways, in its wisdom, has decided to accept a price which is unrealistic,” said an industry insider. Finally, all the Bidders (including Railways), were asked to refer the matter to the Bureau of Industrial Cost and Price or any other agency to examine and work out a fair price.

As the government tries to revive Indian Railways, wagon manufacturers are broadening their product portfolios. Texmaco Rail and Engineering Ltd is merging Kalindee Rail Nirman (Engineers) Ltd with itself. The latter does signalling, telecommunications and railway track works. Titagarh Wagons Ltd has received regulatory approval to acquire a rolling stock manufacturing company in Europe.

The merger will help Texmaco climb the rail business value chain. Sporadic ordering and intense pricing pressure have rendered wagon manufacturing no longer lucrative. From around Rs.17 lakh three years ago, the price of a wagon has come down to about Rs.11 lakh, Dolat Capital Market Pvt. Ltd says. As a result, both revenue and profit of Texmaco fell in the last fiscal year. “Besides, what is more worrisome is the predatory pricing in the recent tender for 2015-16,” Texmaco said in May.

Compared with this, Kalindee registered a healthy double-digit growth in revenues. Last fiscal year, it posted a loss due to high interest costs and provision for bad debts. But Kalindee’s margins are better than Texmaco’s. A merger can help Kalindee overcome liquidity constraints. Texmaco will get a chance to offer an array of services and products, based on which it can bid for large-value turnkey projects in rail infrastructure, be it in the private sector or for Indian Railways.

Like Texmaco, Titagarh also aims to broaden its railway product portfolio. It has started manufacturing electric multiple units and metro coaches. The bid for the European company, if it succeeds, will increase Titagarh’s capabilities in the rolling stock business. Through the acquisition, Titagarh plans to cater to the both state and private sector customers.

These steps should help take Texmaco and Titagarh a long way. With the Indian Railways looking to overhaul its networks, analysts see greater business emerging in infrastructure segments like communications and rolling stock. “The big business and investment opportunities will come from segments like infrastructure, safety and rolling stock. The wagon business is a very minuscule portion of overall business in Indian Railways,” Dolat Capital Market Pvt. Ltd said in a note.

Tracking these prospects, these stocks rose sharply in the last year. Though companies are yet to see strong order inflows, it is critical that the government plans translate into business for these companies in the next few months.
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Sunday, 28 June 2015

15:19

Titagarh Wagons to acquire French Rail Rolling Stock firm

Kolkata: Titagarh Wagons is close to acquiring an European rail rolling stock company based in France. The company has told the stock exchanges its “bid for acquisition as a going concern of a railway rolling stock manufacturing company in Europe has been accepted by the Competent Authorities. However, (this) is subject to fulfillment of certain conditions and the final outcome will be known shortly”.

Titagarh makes rail coaches and earth mover equipment, among other things. Sources indicated the deal, expected to be finalised in a week, is likely to be valued around Rs 300 crore. The target company, apart from having a facility at France, is understood to have market presence in other west Europe countries, too.

Titagarh already has presence in France via a French subsidiary. The Umesh Chowdhary-run company had acquired the assets of Arbel Fauvet Rail out of bankruptcy in the year 2010 and after emerging a successful bidder, started its operations in France under the name of Titagarh Wagons AFR. Earlier this year, the subsidiary bagged an order from the French railways for 400 hopper cereal wagons worth Rs 275 crore.
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Friday, 19 June 2015

20:51

Non adherence to QCBS based evaluation in Wagon Tendering pushes Railways into further struggles

Non adherence to QCBS based evaluation in Wagon Tendering pushes Railways into further struggles

The Railways issuing orders has always been a happy occasion for the wagon makers like Titagarh Wagons, Texmaco, their investors as well as several other unlisted manufacturers.

The department has just come out with one order, but in an unprecedented development, almost all the major wagon makers have refused to produce the wagons for the price quoted by L1 manufacturer. The industry has described the price as predatory as it is even below cost of material.

As a consequence, the Railways, against a total tender volume of 8,509 wagons, has just issued order to only one wagon maker for 1871 wagons.

All this mess happened due to non-adherence of standard bid practice wherein QCBS based evaluation of the proceedings would have made the bidding technically more viable and cost-wise appropriate.  QCBS uses a competitive process among shortlisted firms that takes into account the quality of the proposals and the cost of the services in the selection of the successful firm. The relative weight to be given to the quality and cost shall be determined based on “formula” for each case depending on the nature of the assignment.

The price quoted by the bidder and accepted by the Railways with respect to the order for wagons of type BOXNHL is Rs 10.80 lakh a piece, lower than previous year’s price of Rs 11.74 lakh. The realistic price should have been not less than Rs 13 lakh, the industry has told the ministry.

As per Railway rules, all the other bidders can accept this L1 price and produce their share out of the total tendered quantity.  This clause actually is detrimental to the quality output of any orders which is proven in various Bids earlier by different organisations. Railways should have sensed this situation and invoked the clause of QCBS based evaluation parameters and related Scoring in determining the L1 Bidder.  However this did not happen that which led Railways to compromise with the rate quoted by L1 bidder, and eventually due to various developments, when the other bidders (L2/L3/L4 and L5) were approached to take up the order on L1 price, they have rejected the offer since it is a proven fact that L1 price in this particular bid is a highly loss making, and hence they have refused, and written to Minister of Railways Suresh Prabhu and to Railway Board Chairman A.K.Mittal to revisit and revamp the issue of pricing of wagons.

What is the immediate trigger for the crisis?

“In the face of drought of orders, certain wagon builders, for their own reasons, have put in predatory bids, which are way below even the bare cost of materials,” said the letter addressed to minister Prabhu by the industry.

“It is an existential crisis for the whole industry. Despite repeated pleas, the Railways, in its wisdom, has decided to accept a price which is unrealistic,” said an industry insider.

“In the tender for 2015-16, the L1 price quoted by one large but new company for BOXNHL wagon is Rs 10.80 lakh, whereas the aggregate cost of materials alone for the said wagon is around Rs 13 lakh. Adding to it the conversion cost including labour, consumables, power, finance charges, and other overheads, the cost (without profit) would be substantially higher,” the letter said.

In arriving at a fair price to end this crisis, the industry, coming under the Association of Rolling Stock Manufacturers of India, has suggested that the cost of production at the wagon manufacturing units owned by the government could well be used as a reference.

“Alternatively, you may direct the matter to be referred by the Railways to the Bureau of Industrial Cost and Price or any other agency to examine and work out a fair price,” the letter said.

“We are staring at prolonged closure of most of the manufacturing units in the country if this crisis is not resolved,” the official, in charge of the wagon division of one of the key manufacturers, said.

The development comes close to some grandiose announcements by the ministry of transforming the wagon and other Railways related industry in the country, attracting foreign direct investment and similar other pronouncements, all of which had made investors lap up scrips like Titagarh, Texmaco, Kalindee, Cimmco among others.
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Friday, 19 September 2014

17:46

Titagarh Wagons to enter Locomotive biz as Indian Railways get China push

Titagarh Wagons to enter Locomotive biz as Indian Railways get China push

Analysing the potential of the agreement, Umesh Choudhary, Vice Chairman, Titagarh Wagons expects this development to finally see light of the day as the railways project has been going on since several years in various forms and fashions

A memorandum of understanding (MoU) and an action plan were signed between the government of India and People’s Republic of China in enhancing technical cooperation in railway sector. The potential cooperation areas mentioned in the MoU are: training in heavy haul freight transportation, increasing speed of trains on existing routes, station redevelopment, high speed rail and setting up of Railway University. Analysing the potential of this agreement, Umesh Choudhary, Vice Chairman, Titagarh Wagons expects this development to finally see light of the day as the railways project has been going on since several years in various forms and fashions. Titagarh Wagons is not directly a part the project as of now but the company is getting into locomotives and expects to have some share in this pie, he says in an interview with a TV Channel.  Further, he sees railway space getting a lot of traction hereon.

Below is the verbatim transcript of the interview:

Q: I am sure you would have gone through the news, your first comments on that?

A: The railway sector has been receiving a lot of focus and attention from many countries. We saw that from Japan also, the railway sector was in focus and in China also I happen to be in Delhi and I saw there were a lot of Chinese part of the delegation that went to the railways. I believe that apart from the technical collaboration and training Indian Railway men in China and so on they are also looking at investing in one of the corridors of the high speed apart from some tracks connectivity and tracks enhancement project. I personally believe that this is a sector that should receive a lot of traction going forward.

Q: There are some alerts that are coming by on a request for a proposal with regards to the Indian Railways. I will read it out to you, Indian Railways to issue an Request for Proposal (RFP) in a month for locomotive projects. Can you just tell us how much of an opportunity that would be for Titagarh Wagons if that is the case and in general what it would mean for the industry?

A: This is basically the Madhepura locomotive if I am correct. This has been going on for several years. We have seen this project come up in several forms and fashion but now it seems that it will see the light of the day. This is for high power or high capacity locomotive primarily for the dedicated freight corridor usage. So, it is an important milestone. While Titagarh is not directly a part of this right now but we are getting into locomotives. So, we are in dialogue with a few people to have some share in this pie as well.

Titagarh Wagons stock price

On September 19, 2014, at 13:24 hrs Titagarh Wagons was quoting at Rs 229.85, down Rs 4.9, or 2.09 percent. The 52-week high of the share was Rs 342.00 and the 52-week low was Rs 91.10.

The company’s trailing 12-month (TTM) EPS was at Rs 0.97 per share as per the quarter ended June 2014. The stock’s price-to-earnings (P/E) ratio was 236.96. The latest book value of the company is Rs 315.49 per share. At current value, the price-to-book value of the company is 0.73.
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