Titagarh Rail Systems Limited (NSE: TWL) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Umesh Chowdhary — Vice Chairman and Managing Director
Analysts:
Prachi Ambre — Investor Relations Associate
Balasubramanian A — Analyst
Parvez Qazi — Analyst
Sandeep Mukherjee — Analyst
Shrinidhi Karlekar — Analyst
Khush Nahar — Analyst
Kunal Sheth — Analyst
Koushik Mohan — Analyst
Jennisa Popat — Analyst
Mayank Bhandari — Analyst
Chinmay Gandre — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Titagarh Rail Systems Limited Q3 and Nine-Month FY ’25 Earnings Conference Call.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should any resistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Prachi Ambre from Orient Capital. Thank you, and over to you, ma’am.
Prachi Ambre — Investor Relations Associate
Thank you, Yousuf. On behalf of Titagarh Rail Systems Limited, I extend a very warm welcome to all the participants on Q3 and nine-month FY ’25 financial results discussion call. Today on the call, we have Mr. Umesh Chowdhary, Vice Chairman and Managing Director; Mr. Saurav Singhania, Chief Financial Officer.
Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our beliefs, opinions, expectations as of today. These uncertainties are not a guarantee of our future performance and involve unfortunate risks and uncertainties.
With this, I would like to hand over the call to Mr. Umesh sir for his opening remarks. Over to you, sir. Thank you.
Umesh Chowdhary — Vice Chairman and Managing Director
Good afternoon, Prachi. Thank you very much. Very good afternoon, everybody, and thank you for joining the conference call of the Q3.
The results for the quarter have already been shared and I would say that the performance has been pretty much as expected online, except for the temporary problem that we had on account of availability of which kind of restricted [Technical Issues].
Operator
Ladies and gentlemen, a line for Umesh sir has been disconnected. Please stay connected while we reconnect them to the conference.
Ladies and gentlemen, thank you for patiently holding. We have the line for the management reconnected. Over to you, Umesh sir.
Umesh Chowdhary — Vice Chairman and Managing Director
My apologies, the line got disconnected. I was mentioning that the quarter was pretty much in expected lines except for the problem that we had with the railway factory on account of non-availability of. As we understand, they had some breakdown and for the — mainly for the RSP, for the railway orders, we have to take our wheel sets from the railway-board only or from the railway wheel factory only. And on account of that, the production got muted, particularly on the first month of the quarter, which was in September — in — sorry, in October. November was slight recovery and December was a better recovery. The problem is not 100% solved with RWS, but is gradually getting resolved.
Recognizing this, the railways has to given additional time for delivery of their wagons and have also allowed us to import wheels or use imported wheels in on replacement basis. So, the wheels that we are importing for the private sector wagons can be used in-production of the railway wagons and they would be replenished when the railway wagon wheels are supplied by rail-wheel factory. There would be no financial implications or costs on this account except for some maybe inventory holding costs, which will be very minuscule.
On the other side, in the passenger side, happy to share that we rolled-out our first stainless steel coach for Bangalore Metros was it was rolled-out in the presence, virtual presence of the Honorable Minister of Housing and Urban Affairs, Mr. Manohar Lal Khattar, who also took a virtual tour of the new stainless steel manufacturing — poach manufacturing line and was very appreciative along with the Secretary of, who is also the Chairman of all the metro corporations in the country.
For the propulsion, the traction motor production picked-up and we for the first time in the Q3 touched the 100 traction motor mark, which is in itself a milestone. Now the target would be to get to production of 150 track-pin motors, which we expect that we’ll be able to achieve by June or July of 2025. So the company has also announced two new business verticals and we believe that while the freight wagon business is something which helped the company to grow to an extent from where it was in the last four, five years and the passenger business, the metro and the Bharat will continue to support the company to go to the next level. And after which the growth drivers of the company would be the signaling and safety system, which is a big area of focus from the railways and for the metros and is also synergistic to us.
And for the shipbuilding and maritime systems, which we call SMS, which we are already being present in the shipbuilding and naval shipbuilding primarily. But considering the emphasis of the Government of India on domestic shipbuilding production, we decided to once again relaunch this venture. I had mentioned a couple of years ago that we will not be allocating any capital to this for the next year and a half or two years and that’s exactly what we did. We wanted to first stabilize the passenger rail system business. And thereafter the next two drivers of growth for the company over the next — which will take to the next levels over the next three to five years would be these two businesses, which is significant safety systems and that’s it will be many other system. So this is an overall overview of the quarter and of how things have progressed.
Just a couple of quick updates on maybe on and the metro pipeline. So on as everybody would be aware that there was a discussion going on with the railways about the train lines from 16 to 24 purchases. There were many speculations also in the market about financial terms being changed, etc. I’m happy to share that now formally when the letter has been issued by the railways and the project is — execution of the project has started in-full screen. The first few trains will be taken by the railways on a 16th consideration as originally planned and the further trades will be considered to be taken in longer, that is 24 ports for maintenance, which can be done by the railways exercising the 30% of the maintenance. The railways have also extended the delivery period for the trade considering the period of uncertainty without any financial implications.
On the metro tender pipeline, there are many tenders that are ongoing with the different network authority where the company has been participating. But we believe that this is a segment that will continue to present greater opportunities and particularly with our stainless steel metal line being operational now, we feel that we will also have a competitive future.
So, that’s all as far as my opening comments are concerned, and I’d be very happy to take any questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participants. If you have any follow-up questions, please rejoin the queue. Thank you.
The first question is from the line of Balasubramanian from Arihant Capital. Please go-ahead.
Balasubramanian A
Good afternoon, sir. Thank you so much for taking my questions. And that presentation is a lot of detailed information available. And thank you so much. Sir, my first question regarding of our JV partner Amber — Amber Technologies, like I have mentioned like in Vande Bharat, earlier they come out with 16 coaches per train, but right now it’s been changed to 24 coaches pertain per train is there any impact in our order book, sir? It is big for our books also?
Umesh Chowdhary
So as I just mentioned in my opening sir, concerned that the railways had told in May 2024 that they would like to modify the contract from a 16 car configuration to a 24 car configuration and we had represented to the railways that while we are acceptable to be able to do that, this has to be done in terms of the relevant provisions of the contract and that discussion was ongoing.
Now the railways have finally issued the letter accepting our point-of-view, wherein they have accepted to take the first few trains on the 16 car configuration as well. And thereafter, when they want to increase to the 24 car configuration, it would be done by way of exercise of the auction quantity, which would not reduce our quantity, but in fact enhance the quantity whenever they decide to exercise the option. As of today, there is no plus or minus commercial impact to the contract that we have.
Balasubramanian A
Got it, sir. Sir, is there any delay or the designing and execution side because of these changes?
Umesh Chowdhary
No, the delay has been there because of the period of uncertainty. And as I had mentioned, the railways themselves have acknowledged that this period of uncertainty had nothing to do with the technology provider that is ourselves and they have suitably readjusted the delivery period for the same. We now expect the first train of Vande Bharat to be rolled-out from our factory by March 2026 based on the agreement signed between us and the railroads a few days ago.
Balasubramanian A
Okay, sir. My last question regarding the wheel cells, like if I mentioned production has been impacted non-availability of wheels. However, like reported like a positive territory numbers. Like is there — because of execution issues because of government and private order mix like — and like when the — like when the execution will ramp-up, sir? Because we almost like achieved around 800 and 900 tons per month. We have a capacity of 1,000 wagons. Is there any possibility to increase further maybe next three years time-frame?
Umesh Chowdhary
Yeah. So as I have already said that we are targeting to be at 1,000 wagons per month or 3,000 wagons per quarter and we are already having the capacity to do that to produce at the rate of 1,000 wagons per month or 3,000 wagons per.
In terms of what the competitor has done or not done, I would not be able to comment. I would only say that even in Q3, as per the records which are publicly available from the Ministry of Railway, both private and railway combined, we — Titagarh is the largest producer of wagons subject to correction, but the railway figures the figures published by the railway Board or the Railway ministry say that we have produced 2,218 wheel wagons in this quarter, whereas the other manufacturers production is shown is lesser than that.
Balasubramanian A
Got it, sir. I’ll come back in queue.
Operator
Thank you. The next question is from the line of Parvez Qazi from Nuvama Group. Please go-ahead.
Parvez Qazi
Hi, good afternoon and thanks for taking my question. So a couple of questions from my side. First, would be great if you could give us some update on the project progress for the Ahmedabad and the Surat Metro project?
Umesh Chowdhary
The Ahmedabad project will be executed prior to the Surat Metro project. The final stages of the designing are getting completed. We will deliver the first train of Ahmedabad in Q1 of FY ’26, which is April to June quarter and we are well on-track to be able to do that. Thereafter the production of the Ahmedabad will be done at the rate of starting with one train per month, ramped-up to two trains per month, followed by continuous execution of Surat. And that is how the contract is in that we will execute firstly Ahmedabad and then solid on to.
Parvez Qazi
So only after we complete the delivery of Ahmedabad Metro will the Surat Metro delivery start. Is that correct?
Umesh Chowdhary
There may be an overlap also, but I would say that the priority first would be on the. First few trades of would be rolled-out before the Surat, because it also has to be synchronized with their infrastructure and signaling, etc., being ready.
Parvez Qazi
Got it. Second, you mentioned that railways have extended the delivery timeline for Vande Bharat considering the time which has gone away since see. So now what is the revised delivery timeline for and when will it start?
Umesh Chowdhary
The delivery of the first train, which was scheduled at in June 2025 will be now March 2026, so it’s an additional of nine months and then the balance trades will follow accordingly in the same manner that it will be there.
Parvez Qazi
Sure. And lastly, how has private sector wagon ordering — we know you recently received the wagon order from cement major. So how was the overall ordering in Q3 and what is the outlook going ahead?
Umesh Chowdhary
I would say that the general capex cycle was a little subdued in the last few months, but it has again started coming up. We have seen new inquiries come in and this has not been particular to our sector, but in general, I would say over the last few months, but now things are picking-up again and the testimony to that is the recent order that we won from Group. There are many other negotiations that are ongoing with different companies and we will definitely come back and inform the market as soon as something is coming up.
Parvez Qazi
So any thoughts on Indian railway wagon tendering in FY ’26? And how soon can we see any tender from the Indian railway? Thank you.
Umesh Chowdhary
So, we believe that the government has already reinstated their — their ambition and their target of staying with a few billion tons by 2030 and they are not deterring from that target, which they have set for themselves. And in order to achieve that target, we do believe that the railways will have to come up with additional tenders. The current tenders that they have placed, the orders that they have placed will get executed — by — in this financial — in the coming financial year FY ’26, plus the railways do have the provision of adding 30% to their quantity. So we believe that somewhere in FY ’26, maybe in the Q3, Q4 of FY ’26, the railway should come up with the next bigger tender.
Parvez Qazi
Thank you.
Operator
Thank you. Next question is from the line of Sandeep from SKP Securities Limited. Please go-ahead.
Sandeep Mukherjee
Hi, sir. Thanks for taking my questions. Sir, my first question is regarding what is the status on all the joint-ventures like plant setup…
Operator
Mr. Sandeep, your audio is very low.
Sandeep Mukherjee
Yeah, sorry. Sir, what is the status on the — all the joint-ventures like plant setup progress investments done till now and expected commercialization?
Umesh Chowdhary
Sorry, I’m not able to understand your question, if you can repeat please.
Sandeep Mukherjee
Sir, in the joint-ventures, like what is the plant set of progress in the business and investments done till now?
Umesh Chowdhary
Yes, so the wheelset plant is coming up very well on-track. We are moving as per schedule. The contract stated that the deliveries of the first wheels had to be made by — if my memory serves me correct, April 2026 and the project is very well on-track to be able to that.
Sandeep Mukherjee
Okay, sir. And in the Sidwal joint-venture, what is the expected TAM we are targeting both domestically and export?
Umesh Chowdhary
There is no joint-venture on Sidwal, the Sidwal is an independent company. We have a strategic alliance with them for new products to be introduced and that is an ongoing thing as soon as the items are concretized, apart from the — of course, apart from the fact that they are also an investor into, the Italian associate of the company. So as soon as there are things that are finalized, we will definitely come back to the margin.
Sandeep Mukherjee
Okay, sir. And sir, one last question. Can you provide — please provide the ramp-up of metro coaches and expectation in ramp-up of metro coaches in FY ’26 and FY ’27, like, per cart cards per month?
Umesh Chowdhary
So in FY ’26, we will be able to ramp-up our production to close to 20 cars per month-by Q4 of, I would say end of Q3 or Q4, we will definitely be able to ramp-up our coach production to 20 parts per month. As far as the FY ’27 is concerned, it will also depend upon the new order inflow because we have now started participating and focusing on building up the order pipeline. So the capacity that we have created is to go to up to 36 cars per month per metro, but we believe that the sweet-spot for us would be about 25 cars per month. And we should be able to achieve that in FY ’26 FY ’27 once we are able to get additional orders, which we are hopeful to get. Of course, the Vande Bharat production, which is a separate line will also start in this.
Sandeep Mukherjee
That’s helpful, sir. Thank you. And I’ll be joining the queue, sir.
Operator
Thank you. Next question is from the line of Shrinidhi Karlekar from HSBC. Please proceed.
Shrinidhi Karlekar
Yes, hi. Thank you for the opportunity. Sir, my first question is related to the new business verticals, particularly on the signaling and safety. Would it be possible to elaborate this opportunity in terms of how are you going to target it in terms of product development, technology absorptions or the technology development part of it?
Umesh Chowdhary
Sorry, Shrinidhi, I lost — Shrinidhi, I lost your question. Can you please repeat? I’m sorry.
Shrinidhi Karlekar
Can you hear me now?
Umesh Chowdhary
Yeah, I can hear you now. Yes, please.
Shrinidhi Karlekar
Okay. Sir, my question is related to the signaling and safety business, new verticals you guys are trying. So in that aspect what I wanted to understand is how one should look at the product development part of it, the technology aspect of it and the whole product development cycle of it?
Umesh Chowdhary
Sure. In the safety and signaling is a very wide spectrum business. We have identified for ourselves three sub-segments. One is rail mounted vehicles for a different kind of safety and track and maintainment, which is also relating to safety. One is onboard the kind of systems and the third is more electronic oriented systems. So we are — we already have a an association with one of the largest players in this field for a few products, which is. But we have also now initiated dialogs, which are in different stages of finalization with different technology partners, some may be just by way of POTs, some may be consortium bidding and some might culminate into joint-ventures. So we are also working on designing or setting up our own development centers.
I’m in fact happy to mention in this section I mentioned in my opening comments that our engineering centers for the passenger system now we have ramped-up to more than about 120 people between Bangalore, Hyderabad and Calcutta, where we have more than 100 or I would say approximately 120 people already, which will further be ramped-up to 150 people, which makes us kind of quite independent and self-reliant in terms of doing the designing for the frames and for the components of the and the same would be our target for safety and signaling system as well.
Shrinidhi Karlekar
Understood. And sir, here in terms of opportunity, is it likely to play-out in a year of one or two years or when should look like it’s a long gestation and it could take like maybe beyond two years?
Umesh Chowdhary
So, in terms of — I would say that the way the two new businesses, which is both SMS and SFS that are safety and signaling systems and shipbuilding and Maritime systems should be seen is that in the next one year, there are two KPIs. One is the associations or the strategic alliances that are formed for this business. And the second is the number of tenders that we can participate in the number of orders that we can give.
I do not expect much of revenue to come in the coming year-on FY ’26 from these two, apart from the old orders in the shipbuilding and maritime system that is continued. But the two KPIs this year would be, as I said, strategic alliances that are formed and tenders participated stroke orders one. The revenue of these two businesses will really start coming in and the same will continue for FY ’27 to a great extent, I would say, the first-half of ’27 should also be the KPIs should be. And then second-half of FY ’27 and FY ’28 would be where the revenues will start getting reflected in our the.
Shrinidhi Karlekar
Understood. And sir, one related question more on shipbuilding side, given that you want to revitalize that business, wondering would it be possible to quantify incremental investments that are needed to target bigger opportunities in this business?
Umesh Chowdhary
We will come back with this numbers as soon as the business plan is approved by the Board. Right now, it is more of a strategic decision, the exact budget and the business plan, including the investments, whether it will be done and we had announced in the Board some time ago whether this will be done by ourselves alone or by way of strategic alliances in a company — in the main company or by way of subsidiary. These are things that are being still finalized and I would say we would come back with a complete business plan over the next few days or few weeks.
Shrinidhi Karlekar
Understood. Thank you for answering your questions and all the very best.
Umesh Chowdhary
Thank you.
Operator
Thank you. Before we move to the next question, a reminder to the participants, please restrict your questions to two per participants. Thank you. Next question is from the line of Khush Nahar from Electrum PMS. Please go-ahead.
Khush Nahar
Hello sir. Thank you for the opportunity. Sir, couple of questions from my side. So number-one, can you elaborate more on the maritime and the shipbuilding segment, like what kind of products are we targeting over there? And sir, second, our EBITDA margins for the quarter was around 10%. For nine months, it is around I think, 11% 11.4%. So, are we still confident on achieving around to 13% to 15% going ahead?
Umesh Chowdhary
My apologies — sorry, my apologies again in losing your voice. It’s breaking up. Can you repeat?
Khush Nahar
Hello, is it better now?
Umesh Chowdhary
Yeah, please go-ahead.
Khush Nahar
Yeah. So my first question was on the maritime and the shipbuilding segment. If you can elaborate more on that in terms of products. Second question was on the EBITDA margins. We have done around 11.4% in nine months. So what is your guidance going ahead? Because I think previously we have guided for around 13% to 15% in ’26 considering the ramp-up of metro is a bit delayed? And third, sir, can you guide us on the capex numbers that we’re planning to spend in the next three years?
Umesh Chowdhary
Yeah. So as far as the first one is concerned on the building in maritime systems, the products are basically the same that we had been doing specialized vessels for both Navy Coast Guard but also for civilian users. We have seen also in the last budget that the sector found a lot of mention by the we have been in dialogue with the government and government has decided to take this as one of the key thrust structures because the percentage of state building and maritime systems that Indian producers have in terms of the global production market is very, very small and the government is very keen to make this as a trust sector. And considering the credentials and the approvals that we already have as data, thanks to the orders that we have executed over the last few years, we are able to qualify for, I would say, many or most of our requirements that are coming outside the Navy or the other agencies that are buying ships or maritime systems.
In terms of the EBITDA margin, your second question, we have always maintained that in the freight business, the EBITDA margins are likely to be between, 11% 12% and the operating leverage is of course will help us to improve further. In the current quarter, it has been down by a few percentage of a few decimals of a percentage because of the operating leverage disadvantage. In terms of the passenger coaches, again, we have always said it’s really 10% or thereabouts till we start doing our own propulsion. And once we are able to integrate the complete number of that we produce with our own propulsion that we’ll be able to increase our EBITDA margins by another 4 to 5 basis-points. So that is likely to happen in, I would say, FY ’27 to a greater extent, but FY ’28, I would say, would be the year where we will be able to completely integrate our propriety.
Operator
Mr. Nahar, does that answer your question?
Khush Nahar
Right. Sir, the third question on the capex. If you can answer.
Operator
May we please request you to rejoin the queue, sir. Thank you.
Umesh Chowdhary
So, very quickly on the capex, I’m sorry, I forgot to answer that. So the capex, which we had announced for the freight and the passenger remains the same and that is being implemented now. Most of it has been implemented and the rest will be completed in FY ’26, which is primarily for Bhara. We are looking or exploring the possibility of setting up the complete aluminium coach line also because we believe that the government is again putting a lot of emphasis on lightweight coaches. So as and when that happens, we will come back to announce about the capex of the line for aluminum purchases.
Till now, we were doing the CKD of aluminum purchase from Italy and then assembling them in India, but we would like to for a cost-effective reason, produce them completely in India. For the SSS and VA SMS, which is shipbuilding and maritime and the safety and signal, we will, as I mentioned a little while ago. As soon as we are — the Board has approved, we will announce the capex numbers.
Khush Nahar
Sure, sir. Thank you.
Operator
Thank you. Next question is from the line of Kunal Sheth from B&K Securities. Please proceed.
Kunal Sheth
Yeah, hi. Good afternoon, sir. Thank you for the opportunity. Sir, I have just one question. On one day, you mentioned that our first coach will go in March ’26. So what is the schedule of deliveries post that?
Umesh Chowdhary
The schedule that was there originally will remain as it is in the sense that we will shift the first train from June to 2025 to March 2026. Thereafter the second train was supposed to be delivered after 60 days of the first train and then the first year, there were supposed to be eight trains, the second year 12 trains and so on and so forth. So the starting date only gets shifted from June 25 to March ’26 and the balanced trains will continue to be delivered on the same basis with this readjusted starting date.
Kunal Sheth
Sure. And sir, just a clarification. We did mention that as far as our shipbuilding is concerned, we will not require or we will not put any additional capital in the next 18 months in that business, right?
Umesh Chowdhary
So that is what we had announced about a year and a half or two years ago that because we had taken-up large capex on the passenger side, we would not be allocating any fresh capital or management resources to the shipbuilding venture. Now that capex of the capex cycle of the passenger side is coming to a completion and we are getting into regular production in order to have the next engine for growth ready, which will be able to provide the growth over the next three to five years. We have decided to relaunch this venture where we already have a lot of credentials due to our cost performances. But investments will start when in this business.
So as I mentioned a little while earlier that we will come back on the exact investment plans for both the shipbuilding and maritime system and the safety and signal and system. Once the same has been finalized and approved by the Board, we will announce it with the. I’m unable to give the numbers or the exact dates unless financial.
Kunal Sheth
Sure, sure, sir. Thank you so much and best of luck for the future quarters.
Operator
Thank you.
Umesh Chowdhary
Thank you so much, sir.
Operator
Next question is from the line of Koushik Mohan from Ashika Group. Please go-ahead.
Koushik Mohan
Hi, sir. I hope I’m audible. Sir, my question is basically on how are we looking for next two, three years near-term, sir? And is the government budget impact, how is that impact on us? And like how is the cash flows are working currently?
Umesh Chowdhary
So there were a number of questions. So as far as you know, the outlook is concerned, I just mentioned that the railways have stayed with their path of 3,000 million tons or 3 billion tonnes in 2030. So obviously that is critical for us to be able to maintain our order flow and our production flow is the rangways or the capex of the government is not online then the resultant cascading effect on all sectors, including ours take place. But we do believe that the government has allocated slightly enhanced budget problem compared to last year to the railways and to the capex spending the railways and we are fairly confident and hopeful that the railways deployment will continue in the same manner that we had in to continue.
In terms of the financial results, I think all the — all the details are available in the presentation. If there’s something specific we’d like to know, I’ll answer that. But in general, I mean the numbers, I would only be repeating what is already there in the presentation.
Koushik Mohan
Okay. Sir, I just wanted to understand on your two new businesses that we are entering. One is on the building, which is our old business. I wanted to understand what are we going to do there. And on the second business that I wanted to understand is the safety systems. Is it very big focus that the government is putting up and that’s the reason you’re getting into this business and what expertise that we have here?
Umesh Chowdhary
Again, I just answered these questions a little while ago. Definitely, both these businesses have a large capex spent in terms of safety and signaling system, as we understand, almost INR1 crore is allocated out-of-the budget even this year-on products that will be covered under the safety and signaling systems. Plus there is synergy in terms of metros and all of that. So we believe that both the shipbuilding and maritime systems and the safety and signaling systems both can be very important drivers for growth over the next three to five years and beyond. It was after a lot of deliberation, lot of deep study that we have done and we have discussed this in the Board several times after which we have decided to relaunch or launch both these business verticals or business units, because we do believe very strongly that, which was firing on one engine of growth earlier, then the second engine grew in terms of the passenger rail systems. And these two engines of growth will really take a much for pay the company’s growth to a much further level.
Koushik Mohan
Sir, from — one small request. From next time if possible, can you break-up even the shipbuilding as a new division and give the number.
Umesh Chowdhary
So we will do that as would be appropriate. I mean we take care of take note of your request and we’ll definitely examine.
Koushik Mohan
Sure, sure. Thanks, sir. I’ll get back-in the queue.
Operator
Thank you. Next question is from the line of Jennisa Popat from Systematix Group. Please go-ahead.
Jennisa Popat
Hi, sir. Thank you for taking my question. So I just wanted to know, are we still facing these supply issues? And just wanted to know current run-rate and the run-rate that we expect going-forward?
Umesh Chowdhary
So, yes, the wheelset supply issues are continuing even now. There is still the normalcy of production in rail-wheel factories has not yet been resumed. We are expecting that through the end of this month or next month, things should get better. In terms of the current run-rate, I can only tell you about what we have done in the last quarter and the balance, I think these are available for the industry on websites or on the arrange of websites. But I — in absence of my knowledge, whether it is available in public domain, I will not be able to disclose that, but definitely the problem for the wheel ships are not yet fully resolved. It is continuing in this quarter as well.
Jennisa Popat
So, just a follow-up. So if we have supply sheets from the Indian railways, can we replace part of it with private production and supply to private players?
Umesh Chowdhary
Yeah, we have already done that, but there is a limitation on the number of wagons that the private sectors can also take. Ultimately, the market dynamics is such that more than 90% of the wagons that are produced over a period of time are produced for the Indian railways. It’s only 10% to 15% diversity to the fiber sector. So we are balancing that. We have also got the permission from the railways to use our own use sets, which we have secured for private sector in the production of the railway wagon. So with all of that, we have been trying to mitigate this I would say, temporary shortage.
But historically, this is a problem that has always remained — have always remained a problem and this was one of the reasons why this — it was making a lot of strategic sense for us to enter into the production along with additional 4G. So we do expect that this problem that is there right now for rail-wheel factory should get resolved in the next few weeks. But the longest — I mean the permanent solution will be once our production starts ourselves.
Jennisa Popat
Got it sir. Thank you so much.
Operator
Thank you. Next question is from the line of Mayank Bhandari from Asian Market Securities. Please proceed.
Mayank Bhandari
Thanks for the opportunity. And I just wanted to understand…
Operator
Mr. Mayank, your voice is very low.
Mayank Bhandari
Is it okay?
Operator
Still very low, sir.
Mayank Bhandari
Is it clear enough?
Operator
Yes, sir, please proceed.
Mayank Bhandari
Just wanted to understand one thing on the private side, what kind of margin we are anticipating in long-term until? Hello?
Umesh Chowdhary
Sir, I think there is an echo. If you can get off hands-free to ask the question, it will be easier because I’m unable to understand your question with the echo.
Mayank Bhandari
Hello? Sir, I just wanted to understand what kind of — on the private side, what private wagon side, what kind of margin we should build-in long-term, including the backward integration efforts you are making in this segment?
Umesh Chowdhary
So the blended margin of the — of the freight business, as I’ve always said, is around, 11%, 12%. The volumes of operating leverage or the volume advantage will increase the margins by maybe 0.5 percentage point, maximum one percentage point. But in terms of private sector, if you really…
Operator
Sorry to interrupt, sir. We…
Umesh Chowdhary
To be put on-mute. I cannot — I am unable to speak with background noise.
Operator
Sir, please go-ahead.
Umesh Chowdhary
If you can just mute and conversate yourself. So, in terms of the private sector demand, the demand is only 10% to 15% of the overall demand for. Of course, the percentages of EBITDA margin is maybe 2%, 3% higher in that. But then there is a higher-risk that we carry. Private sector to say in the past, private sector places normally puts price contracts, whereas the railways place a contract with the price variation clause. So if the prices do not — input prices do not up, then the margins that one ends up making in the private sector is about 2%, 3% more.
But in case the prices of commodities like steel, et-cetera rise during the intervening period, then that margin let’s ease up. So for the sake of modeling, I would say it is much better to consider a blended EBITDA margin in this business of about 12%.
Mayank Bhandari
As you mentioned in the presentation for Vande Bharat has increased to INR72,000 crore versus INR36,000 crore in last quarter and the expected tender timeline is also revised to December ’25. So can you give more granularity on this additional INR36,000 crores worth of opportunity pipeline you have mentioned?
Umesh Chowdhary
These are numbers that have been published by the government or in public domain and you know, as far as our knowledge is concerned, it is also restricted by the public knowledge that is available to everybody else in terms of the granularity or concreteness of these opportunities, they will only become concrete once tenders are issued by the railway. So once they are done, then of course we will come back with the details of that. But at this point of time, we are unable to share any more granularity or concrete evidence of the size of the opportunities apart from what we have received from either government published data or some public domain.
Mayank Bhandari
Sure, sir. Thank you.
Operator
Thank you. Next question is from the line of Chinmay Gandre from Canara HSBC Life Insurance. Please go-ahead.
Chinmay Gandre
Thanks for taking my question. Sir, just on the metro side, if you can help us understand the tenders which are quoting right now and which are tenders could kind of open up in the next maybe six months or so?
Umesh Chowdhary
Sure. Can I just request the organizers to please put the participants or even my colleagues on mute because there’s a lot of echo coming in time and again. So, answer the question, in terms of the tenders that we have participated, which are all-in public domain. We haven’t participated in Mumbai and business. And two new tenders that are expected are a number of them. There is tenders expected from another tender expected from Chennai, there is another expected from Bangalore, from, Kampune, from Patna, from Delhi. So there is a number of tenders that are in the pipeline. If one goes to the Ministry of Housing and urban Affairs website to see the ongoing projects, wherever infrastructure for metro is being created, they will obviously require the rolling stock. So all of them are opportunities that you are looking-forward.
Chinmay Gandre
So, that tenders could likely finalize I mean open up in the maybe next till — next six months or so.
Umesh Chowdhary
It would be speculative on our part to give a timeline because these are infrastructure projects, they have to follow a number of steps for the government, including their financial tie-ups and all of that. But we expect that most of these tenders that are there in order for the projects to be on-time will be published over the coming financial year or even finalized, most of them could get finalized over the next financial year, which is FY.
Chinmay Gandre
Thank you.
Umesh Chowdhary
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, this will be the last question for the day. Thank you for joining Titagarh Rail Systems Limited Earnings Conference Call. You may now disconnect your lines. Thank you.