Detailed Narrative
Q3 FY26 Performance and Operational Headwinds
Texmaco Rail reported Q3 FY26 revenue from operations of ₹1,042 crores, with EBITDA at ₹102 crores and PAT at ₹42 crores. For the 9M FY26 period, revenue reached ₹3,210 crores, EBITDA ₹313 crores (9.7% margin), and PAT ₹136 crores. The company experienced a 20-25% reduction in wagon deliveries compared to the previous year, primarily due to persistent wheel set availability constraints and a challenging export environment, which impacted the Bright Power division's turnover.
Texmaco 2.0: Strategic Growth and Diversification
Management unveiled its 'Texmaco 2.0' vision, targeting a 2x increase in top line and higher EBITDA margins within the next 3 to 5 years. This strategy focuses on strengthening core businesses like freight rolling stock and foundry, while expanding into new segments. Planned diversification includes propulsion systems, urban mobility, metro and EMU coach manufacturing, and wheel set production, alongside new ventures in iron pellet manufacturing and mines, with income generation expected to commence quickly in a few quarters.
Robust Order Book and Execution Outlook
As of December 31, 2025, Texmaco's order book stood at a robust ₹5,661 crores, providing strong execution visibility for coming quarters. This includes wagon orders for 4,900 units valued at ₹2,140 crores, rail electrification orders worth ₹1,800 crores, and rail infrastructure orders of ₹511 crores. Management anticipates continued order inflows, particularly from the private sector, and expects the current order book to cover nearly two quarters of freight rolling stock production.
Foundry Business Revival and Export Focus
The foundry division, a significant export contributor, faced near-term pressure📎s due to U.S. tariff issues, resulting in a 30% decline in export volumes year-on-year. However, management confirmed that supply has resumed in the current quarter and projects a 2x growth in foundry exports within the next 3 to 4 quarters. The company is actively working to improve its product mix by increasing private and export wagon orders, leveraging its position as a leading exporter of foundry goods.
Capital Allocation, Cost Control, and Jindal Acquisition Value
Texmaco reported a 9-month capex spend of ₹40 crores, with an additional ₹40 crores committed, projecting a total FY26 capex of ₹75-80 crores. Total debt as of 9 months was approximately ₹800 crores. Management emphasized continuous efforts in cost control, including optimizing major purchases and moderating fixed costs, aiming for improved operating cash flow. The acquisition of Jindal's technology was highlighted as a successful investment, generating a profit before tax of ₹230 crores in 21 months after paying interest.
Supportive Macro Environment and Railway Budget
The Union Budget 2026-2027 allocated a record ₹2.93 lakh crores to the rail sector, with a strong focus on infrastructure, electrification, and track capacity enhancement. Management views this as highly supportive for the industry and aligned with Texmaco's strategic priorities. They expressed optimism for the improvement of the wheel set supply situation and the timely finalization of pending railway tenders, which are crucial for sustained growth over the next 5 to 7 years.