Titagarh Wagons Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Titagarh Wagons Limited (TWL) Q4 FY22 Earnings Concall

 

Management Update:

• TWL said the company backed the highest ever wagon order placed in the history of Indian Railways for a basic value of about INR7800 crore and a total value of INR9000 crore plus, taking the order backlog to INR10,00 crore for the Indian operation.

 

Q&A Highlights:

Abhijeet Dey – Equentis Portfolio Advisors – Analyst

• Average blended margins over three years for the Indian Railways order?

Umesh Chowdhary – MD

• Average blended margin at EBITDA level in TWL’s business is 8-10%.
• With the Indian Railways order, TWL expects the same guidance of 8-10%.

  

Subhankar Ojha – SKS Capital – Analyst

• What’s the bidding order pipeline?

Umesh Chowdhary – MD

• Has a healthy tender pipeline.
  • Demand for metro coaches remain healthy in India.

 

Subhankar Ojha – SKS Capital – Analyst

• ROCE generated from overseas operations and the potential earnings for the next 2-3 years?

Umesh Chowdhary – MD

• Order book of EUR500 million.
• In 2022-23, expects to be EBITDA positive.
• In 2023-24, expects to be net positive.

  

Vasudev – Edelweiss – Analyst

• Delivery terms of Indian Railways order and the split between FY23, FY24 and beyond.

Umesh Chowdhary – MD

• To be delivered over 39 months.
• 25-30% in the first year.
• The balance in next two years.

  

Vasudev – Edelweiss – Analyst

• What’s the Pune contract status and the full execution timeframe?

Umesh Chowdhary – MD

• Barring the COVID delays etc. TWL is on track.
• By FY23, the contract to be fully executed.

 

Vasudev – Edelweiss – Analyst

• Demand outlook from the private sector and from DFC wagon ordering perspective.

Umesh Chowdhary – MD

• The wagon orders placed by Railways includes for DFC.
• Private wagon outlook continues to be strong.

 

Vasudev – Edelweiss – Analyst

• FY22 capex?

Umesh Chowdhary – MD

• Close to INR100 crores, primarily funded out of internal accruals.

 

Panjul Agrawal – Green Portfolio – Analyst

• Reason for other expenses going up 55% YonY.

Saurav Singhania – Group Financial Controller

• It includes INR35 crores of one-time provision for end of life legacy contracts on consolidated basis.

  

Sreeram Ramdas – Green Portfolio – Analyst

• Reason for Italian subsidiary reporting lower revenues, falling 60% YonY?

Umesh Chowdhary – MD

• The contract was signed recently.
  • The designing and production takes 18-24 months.
• Focus in 4Q22 and 1Q23 is to complete the legacy contracts where revenues are much lesser.

 

Sreeram Ramdas – Green Portfolio – Analyst

• Does TWL have capacity to execute all its current orders over the next 3-4 years?

Umesh Chowdhary – MD

• By and large has the capacity.
• If any balancing capacity needs to be created, it will be created.