Government infra spending to revive wagon manufacturing

“The government’s capex push with infrastructure focus would shoot up demand for rolling stock. Already, Indian Railways plans to place a record level of wagon orders while private container train operations are also expected to get a leg up with operations of portions of dedicated freight corridors,” Gupta said in an interview.

The Union budget has raised capex for FY23 by a record 35% to ₹7.5 trillion, with most of the additional capex expected to go to infrastructure projects.

There is a lot of traction for orders now and thus the order book position should improve for all companies in the space, including Texmaco, Gupta said.

A lot of work from railways, metro, and other projects, including that which involves ballastless tracks and signalling, is also coming in the engineering, procurement and construction (EPC) segment where the company would actively participate, according to the Texmaco MD.

Rolling stock accounts for about 40% of Texmaco’s total turnover, which stood at ₹1,689 crore in FY21. EPC accounts for another 40%, while the remaining 20% comes from its foundry and other small business verticals.

“Now, the focus will be to start building an order book again here and participate in EPC tenders. There is a huge amount of work that is coming up for EPC,” Gupta said.

The company has an order book of 1,400 wagons and expects the size to grow substantially in FY23 on the back of big railway tenders. Also, the private sector is expected to provide more orders to the company.

To expand its operations, Texmaco also aims to enhance its exports and tap markets in the African continent.

Texmaco is targeting Africa, where the company has already bagged an order for 200 wagons in Liberia, Cameroon, and Mozambique, Gupta said.