Key takeaways of the call

Standalone Order book at the start of Jan 1, 2019 was Rs 2300 crore. The order book of CIMCO was about Rs 400 crore. Current order book will get converted to revenue over Q4FY19 & FY19-20.

So far in current fiscal, IR have ordered for about 11000-12000 wagons against a target of 21000 wagons. IR will tender out balance soon subject to come into effect of code of conduct.

Appetite is strong for wagon under Wagon investment scheme as well as Coal investment in wagon. Materialization of this into order will largely depends on IR approvals.

Coal India wagon purchase - it may come up in FY19-20. CIL has intended to invest Rs 5000 crore in wagon purchase. The order may rout through IR.

Titagarh wagon manufacturing capacity is 6400 wagons and that of CIMCO was about 2000 wagons. Capacity is full for wagon units. In terms of Volume the Titagarh has a wagon order book of 6700 wagons and CIMCO has for about 1200 wagons. Q3FY19 wagon output of CIMCO was about 325 wagons and 470 wagons by TWL. The company will increase the dispatch of wagon in Q4FY19 on wards.

Under Bucket Filling method the number order placed as on date depends on the free capacity considering existing workload as on date. So the company will be having space to get wagon order in fresh/coming tenders considering CIMCO as well and order execution.

The coach unit at Uttarpara that is currently building EMU will be used for metro coach building. Current capacity of this Uttarpara unit is 27 EMU coach a month. The company target building of 15-20 metro coaches per month from this facility.

The company has overhauled its France operations and brought in new CEO last month. And the new orders bagged by French Operations are with better margin. French operation which was acquired in 2011 is having positive growth since 2012 and during this period, it has registered profit except for two years.

Italy operations have registered a loss of Euro 10 million last year. The company has managed to reduce the bleeding to great extent with closing down of smaller lines/unit and manpower reduction etc.

The Italian subsidiary is currently in negotiation for couple of contracts and expects that to come in next week. With this order the Italy operations are expected to make a complete turnaround. However Italy will reduce losses and be close to break even in FY19-20 and will return to profit by FY21. Expect the French operations to return to profit in FY19-20.

Expect the sales of French subsidiary to be same as that of last year and that of Italy will be little lower for current fiscal.

Margin proportionately not improved with sales due to fixed price contracts of private players considering steel price increase and execution of old IR wagon orders.

Shipbuilding order book as end of Dec 2018 was just Rs 50 crore. The company is in negotiation for some contract in shipbuilding space and expects to get it soon.

The company is the only Indian company with its own credentials in metro coach building. Market for metro coach is very promising.

Metro coach building capacity in the country is not enough to meet the demand and have room for entry of more players.

Expect booking of first Metro coach order to happen by FY20 and revenue booking of to occur starting in FY2021.

Received some development orders from IR with Italian technology.