See order worth Rs 300-500cr from rail budget: BEML

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Come railway budget and companies that cater to the world's largest transporter, the Indian Railways, are expected to see a windfall of business. After Mamata Banerjee presented the railway budget on Friday, BEML is expected to be the strongest beneficiary, given the announcement of additional wagons.

Also read: Rail Budget: Mamata keeps fares, freight rates unchanged

VRS Natrajan, the company's CMD, said BEML would benefit from the announcement of AC double-decker coaches and the dedicated freight corridor would mean more business for the company. He however said that the company was not into the manufacture of ordinary wagons but would benefit from the other orders. "All the other coach and car manufacturing that the railway minister announced translates into orders to the extent of Rs 300-500 crore in the current year and the years following," he added.

Here is a verbatim transcript of VRS Natrajan's exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: We have spoken after several rail budgets that Lalu Prasad Yadav had presented. This time the target is 18,000 wagons, what does it mean to you by way of potential addition to your order book?

A: We already hold orders worth Rs 3,300 crore and the announcement of AC double-decker coaches for intercity, diesel multiple units (DMU), mainline electric multiple units (MEMUs), and the emphasis on the dedicated freight corridor will translate into business for BEML. The Railway Minister also emphasised on the rehabilitation and refurbishment of existing coaches, which will also be a new opportunity for increasing our business as we are good in refurbishing and building existing coaches. I am sure the super fast expresses, non-stop and point-to-point, will add to the business in terms of increased order book position.

I am happy that the Railway Minister also talked about greenfield toilets; greenfield toilets are also going to give a business to BEML, we have divestment in that area. Overall, it's a very encouraging budget keeping up with the trend of increasing business for coach builders as well the manufacturers. The freight corridor will be particularly beneficial to BEML because we have already developed India's first aluminium wagon for carrying 80 tonne capacity of ore and the materials. We will sign a Memorandum of Understanding (MoU) with SAIL for developing 100 stainless steel tonne wagons of 25 tonne axles of four each. This I think is a great opportunity for BEML.

Q: Out of these 18,000 wagons, how many do you believe will come your way and what kind of revenue do you generate per wagon? What do you think of these double-deckers, do you have the infrastructure in place to start these and how much revenue that will generate for you? Could you put some numbers and timeline on how this pans out?

A: As far as double-decker AC coaches are concerned we are tying up with a MNC for technology, which will be additional business for us because we have got the capacity to roll out this.

We don't however manufacture the ordinary 20-25 tonne wagons. We are into the manufacturing of high-end wagons that are of 80-100 tonnes. We are focusing on the emerging freight corridor, which will carry a higher load of 100 tonnes and would be of higher speed.

Q: One clarification: If you were to get any part of these orders of 18,000 wagons, would it show up in any part of FY11 in your earning?

A: While we are not into manufacturing ordinary wagons, all the other coach and car manufacturing that the railway minister announced translates into orders to the extent of Rs 300-500 crore in the current year and the years following.

We already have 900 coaches for the current year while another 900 coaches have been projected for the next year. We have designed India's first stainless steel (electrical multiple units) EMU and we have got first order for it - it will replace the existing suburban trains in Mumbai, Delhi, Kolkata and Chennai and will be a bigger business. I am confident that for the current year, we will cross Rs 1,000 crore in the rail business.