Titagarh Rail Systems (TITAGARH) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue grew 12% year-over-year, with wagon sales up 13% despite labor absenteeism and election disruptions; Board approved unaudited results for the quarter ended June 30, 2024.

• Maintains net debt-free/negative status and market leadership in freight wagons with ~20-30% share.

• Strong order book of Rs 14,117 crore (standalone) and Rs 13,326 crore (JV share) as of June 2024.

• Production for Bangalore Metro commenced after delays, with ramp-up on track; first train dispatch expected in Q2 FY25.

• Exported first traction converters to Europe/Italy, marking a significant technological milestone.

Financial highlights

• Q1 FY25 revenue from operations at Rs 903.1 crore, nearly flat year-over-year but down sequentially; EBITDA at Rs 101.8 crore, margin at 11.3%; PAT at Rs 71.3 crore, up 5.5% year-over-year.

• Freight segment EBITDA margin at 12-12.5%; passenger segment margin at 10-11% (without propulsion), rising to 14-15% with propulsion integration.

• EPS for Q1 FY25 at Rs 5.30 (standalone), Rs 4.98 (consolidated).

• Employee costs increased due to talent pipeline expansion and new design center in Bangalore.

• Net debt-free/negative; interest costs negligible, with further optimization expected after credit rating upgrade to AA- by CRISIL.

Outlook and guidance

• Confident of achieving five-digit wagon production, targeting over 10,000 units versus 8,400 last year; order backlog of 20,300 wagons and 1,592 Metro/Vande Bharat coaches as of June 2024.

• Passenger coach production to ramp from 10-15 cars/month in Q3/Q4 FY25 to 70 cars/month in 3-4 years.

• Capacity being created for 800-850 passenger cars and 12,000 freight wagons annually.

• Positioned for future revenue growth as current design-phase projects transition to deliveries.

• Order book visibility for 1.5-2 years; market share in wagons expected to remain at 20-26%.