Titagarh sees 15-20% growth in orders from freight corridor

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Titagarh sees 15-20% growth in orders from freight corridor

In an interview with CNBC-TV18, JP Chowdhury, Chairman of Titagrah Wagons spoke about the latest happenings in his company and sector.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Bullish on Gammon Infra, Titagarh Wagons: SP Tulsian ALSO READ See latest News about Titagarh Wagons See previous management interviews See what other Experts & Brokerages are saying about Titagarh Wagons Titagarh Wagons BSE | NSE 31/05/12 Are Mutual Funds betting on Titagarh Wagons?

In an interview with CNBC-TV18, JP Chowdhury, Chairman of Titagarh Wagons spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of the interview. Also watch the video.

Q: There has been a lot of excitement about the freight corridor. As far as you can see, it how far are we away in terms of a timeline before any of these orders would really turn in to reality and if they do then what kind of volumes do you see coming through to you if any at all because of the freight corridor?

A: The freight corridor should take off in the next one year or so and it should take another 3-4 years to complete. But we are not waiting for our orders for the freight corridor. The freight corridor will bring us orders for some special types of wagons - high speed and high axle load wagons.

But apart from that the railway's growth has been quite good and we are quite optimistic about the railway boards' purchase in the coming period.

Q: There were capex plans announced even last year by the railways. But are most of them tendered? Is there anything on the anvil and what kinds of orders have you got from the railways this year and are you expecting anything before the financial year is out?

A: Our order book as on October 1 was about Rs 700 crore. The current year's tender is under finalization. We expect quite good orders before the end of the fiscal.

Q: There is a general expectation that somehow the order jump would be  quantum - perhaps a 100-200% as if something is really changing in the way railways does business. Is that the case or do you believe the order book will pick up but at 10-15% as it has normally done over a period of time?

A: There is nothing for the order book to take such a huge jump. But it will be a steady growth of about 10-15-20%.

Q: What are your plans now with Cimmco Birla?

A: Cimmco Birla has already started production we are now participating in the tenders of the railway board and we should be getting our orders along with the finalization of the tenders in the coming period - in the coming weeks.

Q: We understand the debt of Rs 500 crore was restructured for Cimmco Birla. Will you be raising more debt? What is the plan in terms of capital expenditure for that company?

A: We are not planning any massive capital expenditure and in the last one year we have done a lot of modernization and a lot of revamping work in Cimmco and its ready to go.

Titagrah wagons has invested Rs 23 crore in the equity of Cimmco and we have plans to invest upto Rs 48 crore. Titagrah wagon is quite bullish about the prospect of Cimmco's revival.

Q: Just in terms the product mix that you are seeing coming from the railways, is the railways starting to focus on perhaps high speed corridors or anything similar to the Chinese - some high speed trains etc. If such things are happening, are the orders going to come to Indian companies or Alstom or the other global guys are going to end up with these orders? Just in terms of what could it mean if the railways shift track and go on to high speed - will it come to Indian companies?

A: It will never go to the overseas companies in totality. There will always be questions of joint ventures between the overseas and the Indian companies. The benefit will also come to the Indian companies.

Q: Are you at the moment talking or negotiating with any of the global power houses in terms of wagons or engines to do a joint venture and bring the technology in?

A: Yes, the first rake for the EMU (electric multiple unit) coaches, which has been designed by us indigenously based on the inputs by the Indian railways, has been put into passenger service. It is doing quite well. We expect to complete 5 rakes for which we have the orders in the coming 3-4 months.

Similarly, we are participating in the various metro coach tenders in collaboration from some international companies including Switzerland and Germany and USA.