Texmaco Rail & Engineering Limited — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

Texmaco Rail reported a strong Q2 FY26 with significant revenue and profit growth, driven by increased freight car deliveries. The company's order book remains robust at ₹6,367 crores, providing good visibility. Strategic initiatives like the RVNL JV and HORMANN MOU are expected to drive future growth, despite past challenges such as wheelset supply issues and US tariffs on foundry exports, which management is actively addressing.

Highlights

  • Q2 FY26 Revenue from operations: ₹1,258 crores

  • Q2 FY26 EBITDA: ₹132 crores, with a margin of 10.5%

  • Q2 FY26 PAT: ₹64 crores, with a margin of 5%

  • H1 FY26 Revenue from operations: ₹2,169 crores

  • H1 FY26 EBITDA: ₹211 crores

  • H1 FY26 PAT: ₹93 crores

  • Q2 FY26 Freight cars delivered: 2,334 units, a 28.6% increase compared to Q1

  • Order book as of September 30, 2025: ₹6,367 crores

  • Wagon order book as of October 1, 2025: 6,500 units

Key financials

3 periods

Headline

  • Order Book (as of Sep 30, 2025)
    ₹6,367 Cr
  • Wagon Order Book (as of Oct 1, 2025)
    6,500 wagons

Q2 FY26

  • Revenue
    ₹1,258 Cr
  • EBITDA
    ₹132 Cr
  • EBITDA Margin
    10.5%
  • PAT
    ₹64 Cr
  • PAT Margin
    5%
  • Freight Cars Delivered
    2,334 units
    QoQ +28.6%
  • Foundry Sales Volume
    8,413 metric tons

H1 FY26

  • Revenue
    ₹2,169 Cr
  • EBITDA
    ₹211 Cr
  • PAT
    ₹93 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

Volume

  • Wagon Production Capacity Volume · a year · High confidence 15,000-16,000 wagons
    we can make 15,000-16,000 wagons in a year.

    — Indrajit Mookerjee

Growth

  • Export Growth (Foundry) Growth · next 2 to 3 years · High confidence 3x to 5x
    we are targeting 3x to 5x kind of growth in exports for next 2 to 3 years.

    — Sudipta Mukherjee

Profitability

  • Foundry Margins Profitability · High confidence remain very steady and healthy
    And the margins remain very steady and healthy.

    — Sudipta Mukherjee

  • EBITDA Margins (Overall) Profitability · coming quarters or coming years · Medium confidence high teens
    It will be on high teens in the coming quarters or coming years.

    — Sudipta Mukherjee

  • EBITDA Margins (Core Business) Profitability · Medium confidence mid-teens
    take it towards the mid-teens

    — Sudipta Mukherjee

Order Inflow

  • Indian Railway Tender (Wagons) Order Inflow · Q4 FY26 · Medium confidence expected to come at least within the last quarter of this financial year
    majority of the tender in the Indian railway... expected to come at least within the last quarter of this financial year.

    — Sudipta Mukherjee

Debt

  • Funding for Capex Debt · High confidence through the debt we already have and this balance from net accrual
    So it will be through the debt we already have and this balance from net accrual.

    — Kishor Kumar Rajgaria

Order Book Execution

  • Infrastructure Order Book Execution (₹6,000 crores) Order Book Execution · FY26 · Medium confidence 30%, 40% would be executed within this financial year, of the infra part of it, which is 50 -- around 40% of the over INR6,000 crores.
    So you can say it is 30%, 40% would be executed within this financial year, of the infra part of it, which is 50 -- around 40% of the over INR6,000 crores.

    — Sudipta Mukherjee

Risks & concerns

  • Short supply of wagon wheel sets

    medium

    Affected Q1 FY26 and early Q2, but supply issue now resolved, and production is expected to return to stable levels.

    Management acknowledged

  • U.S. tariffs on foundry exports

    medium

    Led to a decline in export sales for the Foundry division, but the company is taking necessary actions and is hopeful of overcoming it shortly.

    Management acknowledged

  • Indian Railway tender pipeline delays

    low

    The majority of Indian Railway tenders are expected to come in the last quarter of FY26, providing future order inflow.

    Analyst acknowledged

Areas of evasion (5)

  • Specific monthly production numbers
  • Exact H2 wagon sales targets
  • Specific Q4 tender details
  • Precise land valuation and monetization timeline
  • Reasons for QIP investor exits

Q&A highlights

1 direct, 1 evasive
Order book reduction and sales growth Partial
INR1,200 crores per quarter is also -- you see that it is one of the highest compared to -- if you compare with a few quarters, then it's on a growth trajectory. We definitely believe we can do better from here in line with our growth trajectory.

Analyst questioned a perceived stagnation in quarterly sales and a reduction in the order book, which management addressed by emphasizing growth trajectory and continuous order inflow rather than providing specific future sales targets.

Asked by Vishal Thakkar

QIP investors selling shares and alternative fundraising Evasive
an answer which we don't know. It's very difficult to say why an investor... Some people invest for long-term gain, some people invest for quick gains.

Management could not explain why QIP investors sold shares, which is a common concern for investors regarding confidence. They also dismissed immediate QIP/rights issue plans, focusing on operational efficiency and existing debt.

Asked by Vishal Thakkar

Monetization of 12-acre land bank Direct
We've looked at that, but we felt that developing is a better option than selling it because we get better value out of it. And we are not in dire need of cash at this point of time. Our debt equity is fine.

Analyst questioned the strategy of developing land instead of selling it to reduce debt. Management provided a clear strategic rationale for development over immediate sale, indicating financial stability and a long-term value creation approach.

Asked by Vishal Thakkar

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Freight Car Deliveries

Texmaco Rail reported a robust Q2 FY26 with revenue from operations reaching ₹1,258 crores, contributing to a first-half revenue of ₹2,169 crores. EBITDA stood at ₹132 crores (10.5% margin) for the quarter and ₹211 crores for H1. Profit after tax was ₹64 crores (5% margin) for Q2 and ₹93 crores for H1. The company delivered 2,334 freight cars in Q2, marking a significant 28.6% increase from Q1, while the Foundry division achieved sales of 8,413 metric tons.

Robust Order Book and Strategic Partnerships for Future Growth

As of September 30, 2025, Texmaco's order book was valued at ₹6,367 crores, with approximately 6,500 wagons in the order book as of October 1, 2025, providing strong revenue visibility. Key strategic moves include the successful amalgamation of Texmaco West Rail, a joint venture with RVNL for rolling stock and infrastructure, and an MOU with HORMANN Vehicle Engineering GmbH for passenger mobility design. These initiatives are expected to drive "quantum growth opportunities" in railway infrastructure and rolling stocks.

Addressing Supply Chain and Export Tariff Challenges

The company faced a short supply of wagon wheel sets in Q1 and early Q2 FY26, which has since been resolved, leading to expectations of stable production levels. The Foundry division's export sales were impacted by U.S. tariffs, but management is actively implementing strategies to circumvent these external factors and remains confident in overcoming the issue shortly. Texmaco is targeting "3x to 5x kind of growth in exports for next 2 to 3 years" across Africa, the U.S., and Australia.

Focus on Operational Efficiency and Margin Expansion

Management emphasized a continuous target to improve the bottom line and achieve "higher teens" EBITDA margins in the coming quarters and years, with core business margins moving towards "mid-teens." This improvement is supported by enhanced operational efficiency, as evidenced by improved receivables, quick ratios, and inventory turnover. The company also highlighted its market leadership with over 30% share in wagon execution, aiming to sustain this momentum.

Strategic Land Monetization and Financial Prudence

Texmaco holds a 12-acre land parcel in Kolkata, freed up by restructuring non-wagon businesses. Instead of an immediate sale to reduce debt, management plans to develop the land, believing it will yield "better value." The company stated it is "not in dire need of cash" and maintains a "very healthy" debt-equity ratio, preferring internal accruals and existing debt for foundry expansion and new initiatives rather than new QIPs.

Expanding into New Railway Segments and International Markets

Texmaco is diversifying its product portfolio beyond traditional wagons, including new boogies, couplers (locomotive and passenger train), and track renewal services, with weldable crossings supply already ramping up. The company is actively pursuing opportunities in the 2x25 kV overhead electrification system, a growing segment within Indian Railways' ₹1.42 trillion H1 capital expenditure, where it has an "almost 2 years order book" with "higher teens EBITDA" contributions.

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