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.