Texmaco Rail & Engineering Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Texmaco Rail reported a solid Q1 FY26 with revenues of ₹911 crores and PAT of ₹29 crores, despite temporary supply chain disruptions for wagon wheel sets and inspection delays at Texmaco West, which have since normalized. The company maintains a robust order book of ₹7,053 crores, ensuring strong visibility for upcoming quarters. Management expressed confidence in achieving full-year guidance, driven by diversified order inflows, strategic joint ventures, and capacity expansion plans.

Highlights

  • Revenue from operations stood at ₹911 crores for Q1 FY26.

  • EBITDA for the quarter was ₹79 crores, reflecting a margin of 8.7%.

  • Profit After Tax (PAT) was ₹29 crores, with a margin of 3.2% of revenue.

  • Order book as of June 30, 2025, was strong at ₹7,053 crores, providing significant execution visibility.

  • The company delivered 1,815 freight cars during Q1 FY26.

  • Foundry division achieved a sales volume of 8,667 metric tons.

  • Revenue decline was attributed to short supply of wagon wheel sets and temporary holdups at Texmaco West, both now resolved.

Key financials

  1. Revenue from Operations ₹911 Cr
  2. EBITDA ₹79 Cr
  3. EBITDA Margin 8.7%
  4. PAT ₹29 Cr
  5. PAT Margin 3.2%
  6. Order Book ₹7,053 Cr
  7. Freight Cars Delivered 1,815 units
  8. Foundry Sales Volume 8,667 metric tons
  9. Consolidated Net Debt ₹650 Cr

What they filed

Q1 FY27: revenue down 16.9%, net profit up 72.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,346 1,326 1,346 911 1,258 −7%1,042 −21%1,167 −13%757 −17%
EBITDA132 131 98 71 124 −6%89 −32%106 +8%57 −20%
Net profit74 76 39 29 64 −14%42 −45%58 +49%50 +72%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Full Year FY26 Revenue Growth Revenue · FY26 · High confidence Maintain prior guidance
    whatever we have the guidance for the year, we can -- we will stand by that. It's not going to affect the guidance otherwise.

    — Sudipta Mukherjee

Growth

  • FCD (Freight Car Division) Growth Growth · FY26 · High confidence 35% to 40%
    I was still expecting to grow about 35% to 40% for the year. ... So are we still on track to maintain this guidance? ... Yes.

    — Sudipta Mukherjee

  • Wabtec JV Growth Growth · FY26 · High confidence 15% to 20%
    we feel that we will have a decent 15% to 20% growth minimum in the coming -- this financial year also.

    — Sudipta Mukherjee

  • Touax JV (Leasing) Growth Growth · Future · Medium confidence Significantly higher than 12-15%

    Previously 12% to 15% → Significantly higher than 12-15%

    this business has also grown on a pace of a decent 12% to 15% last couple of years. But now we feel with the rising demand... we want to scale this business up also. And we expect to grow this business significantly.

    — Sudipta Mukherjee

  • Components and Railway Castings Growth Growth · Next 2-3 years · High confidence 3 to 5x
    the components and the railway castings is expected to grow to 3 to 5x over the next 2, 3 years.

    — Sudipta Mukherjee

Margin

  • FCD EBITDA Margins Margin · Full Year FY26 · Medium confidence double digit, lower teens
    for the EBITDA margins on the FCD side, we had guided for double digit for the full year. When do we think hitting those ranges in this quarter or maybe a quarter two? ... upward movement towards lower teens, at least in the same.

    — Sudipta Mukherjee

Order Inflow

  • Order Intake Momentum Order Inflow · Coming quarters and next financial year · High confidence Continue
    this momentum will continue in the coming quarters, and we will have enough orders in hand even for the next financial year in all the verticals.

    — Sudipta Mukherjee

Operations

  • Nymburk JV Plant Operation Start Operations · FY26 or next quarter (Q2/Q3 FY26) · High confidence Start operation
    And we expect to start operation of this plant in this financial year itself and maybe maximum by next quarter.

    — Sudipta Mukherjee

Market Share

  • Automobile Wagon Business Market Share Market Share · Next three quarters · High confidence 65% to 70%
    I can share that around 65%-70% market share of this business. And our order for the next three quarters is in our hands.

    — Sudipta Mukherjee

Capacity

  • Foundry Capacity Capacity · Future · High confidence 80,000 to 90,000 metric tons
    we are doing a first phase and we have reviewed and debottlenecking our foundry and taking it to a level of 80,000 metric ton and 90,000 metric tons.

    — Sudipta Mukherjee

Risks & concerns

  • Geopolitical situation impacting raw material sourcing

    medium

    Management noted that while no nation is 100% self-reliant, the government and stakeholders are actively working to address potential issues.

    Management acknowledged

  • Short supply of wagon wheel sets from Indian Railways

    low

    Sector-wide issue and import restrictions caused Q1 revenue dip, but management states the crisis is over and supply is improving.

    Management acknowledged

  • Temporary revenue dip at Texmaco West due to RDSO inspection holdups

    low

    Caused temporary revenue dip in Q1, but management states the issue is resolved and operations are in full steam.

    Management acknowledged

  • Political uncertainties affecting Bangladesh railway EPC projects

    low

    Management stated that despite political uncertainties, the first project was completed successfully and the second is progressing well, with the 'worst is over'.

    Management acknowledged

Areas of evasion (5)

  • Specific value/contribution of RVNL MoU
  • Exact timeline for Odisha foundry becoming operational
  • Specific EBITDA margin target beyond 'lower teens'
  • Specific timeline for new Indian Railway tenders
  • Specific price per ton for castings

Q&A highlights

1 direct
FY26 guidance and impact of wagon wheel set shortage Direct
As you mentioned, that has been normalized now. So can you help us in terms of guidance for FY '26? Can it surpass the FY '25 levels? ... whatever we have the guidance for the year, we can -- we will stand by that. It's not going to affect the guidance otherwise.

Confirms that the temporary supply chain issue for wheel sets is resolved and the company is on track to meet its previously stated FY26 guidance, indicating resilience.

Asked by Abhinav, ICICI Securities

Price difference between private and Indian Railways wagons and Odisha foundry timeline Partial
So if I consider like a normal wagon to be in a range of INR30 lakhs, then I might charge a premium upon the private wagon. So can it be upwards of around INR45 lakh to INR50 lakh? ... It varies from INR35 lakhs a wagon to around INR70 lakhs a wagon. ... when will the upcoming 40,000 tonne Odisha foundry get operational? ... there is no time line we have defined. We have -- if you have gone through our present Board the notes and the press releases we have done, we have tweaked it into we have divided it into two phases.

Reveals significant margin potential in private wagon orders due to higher pricing, but management is evasive on the specific timeline for the Odisha foundry, indicating potential delays or a phased approach.

Asked by Devarsh Shah, Sunidhi Securities

Sourcing of wheel sets and potential expansion into manufacturing Partial
we are facing problem of sourcing wheel set in only single railway wheelmaking factory is unable to supply to all the manufacturers. So we have to source from outside China or Taiwan or somewhere where so why we are not expanding in this line? ... we are constantly evaluating the business, the market. And if you find that it is worth investing money, we definitely will do that. But we cannot make any comment at this stage.

Highlights a critical raw material bottleneck for the industry and the company's cautious stance on backward integration into wheel set manufacturing, despite acknowledging the problem.

Asked by Ashok Shah, Eklavya Invesco Family Office

2 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance and Order Book

Texmaco Rail reported a revenue from operations of ₹911 crores for Q1 FY26, with an EBITDA of ₹79 crores, translating to an 8.7% margin. Profit After Tax (PAT) stood at ₹29 crores, achieving a 3.2% margin. As of June 30, 2025, the company's order book was robust at ₹7,053 crores, providing strong revenue visibility for upcoming quarters. Management highlighted that the order book is diversified across various business domains, not heavily tilted towards one sector.

Wagon Business Operations and Supply Chain Resolution

During Q1 FY26, Texmaco delivered 1,815 freight cars. The decline in revenue was primarily attributed to a sector-wide shortage of wagon wheel sets from Indian Railways and restrictions on imports. Additionally, the acquired Texmaco West experienced a temporary revenue dip due to inspection holdups by RDSO. Management confirmed that both issues have been resolved, with wheel set supply normalizing and Texmaco West operating at full steam, expecting revenues to normalize in the future.

Strategic Joint Ventures and International Expansion

Texmaco's joint venture with Wabtec Corporation (USA) is expected to achieve a decent 15% to 20% growth in FY26. The freight rolling stock leasing JV with Touax from France, which historically grew 12%-15%, is now targeted for significant growth due to rising private investment. A third JV with Slovakian and Czech entities, Nymburk, for a specialized freight rolling stock manufacturing plant, is expected to commence operations in FY26 or by Q2/Q3 FY26, targeting both domestic and European markets.

Foundry and Components Business Outlook

The Foundry division achieved a sales volume of 8,667 metric tons in Q1 FY26. Management projects the components and railway castings business to grow 3 to 5 times over the next 2-3 years. This growth will be supported by debottlenecking existing foundry facilities in Kolkata and Raipur, aiming to increase capacity to 80,000-90,000 metric tons. The company is also expanding into new markets like Automobile and Mining for coupler manufacturing.

Amalgamation of Texmaco West and Bangladesh Projects

The amalgamation of Texmaco West is nearing completion, with the NCLT final order received and certified true copy applied for, expected within 10-15 days. The amalgamation will be effective from April 1, 2025. Regarding Bangladesh railway EPC projects, management reported successful completion of the first project despite political uncertainties and stated that the second project is progressing at a fast rate, expected to finish by March 2026, with the 'worst being over'.

Financial Stability and Credit Rating

Texmaco's long-term bank facilities rating has been upgraded to CARE A (stable outlook) by CARE, with the short-term rating reaffirmed at CARE A1. This upgrade reflects the market's confidence in the company's strong financial performance and stable growth trajectory. The consolidated net debt was reported to be in the range of ₹650-700 crores as of July 1, 2025.

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