Titagarh Rail eyes export market to cash in on China+1 sentiment

Titagarh Rail Systems, the country’s largest manufacturer of freight wagons, is keenly exploring the export market amidst growing global calls to diversify beyond China, called China Plus One, to expand its presence in the passenger segment abroad.

The Kolkata-based company already has a presence in Europe through its Italian passenger and metro coach-making subsidiary Titagarh Firema and now the focus is to export Make in India products worldwide.    

Prithish Chowdhary, Deputy Managing Director of Titagarh Rail Systems Limited, said the export market has a very high growth potential, especially on passenger rail systems and the company is keenly looking at it.

“There is a global sentiment of China Plus One and people are not keen on buying from China. The cost structure between European and Indian companies in all aspects whether engineering or manufacturing in rail systems, there is a huge arbitrage we can get. We will focus on the export market very keenly,” Chowdhary told Business Today.

A team from the company has been assessing the business prospects south Southeast Asia, west Asia, Africa, the US and South America.     

“We have done some work and are close to finishing a prototype for a converter, which is part of propulsion and a key technological item, for Rome metro systems. We are building it in Uttarpara. Earlier, the narrative was hi-tech items made in Europe and fitted in India and for the first time, it is made in India and fitted in a metro rail in Europe. Going forward, this is was we aim to do ‘Make in India, Make for the World’. We are a firm believer in it,” he said.

What will be the timeline? The company initially wanted to stabilise the Indian market as far as passenger rail systems are concerned and then the export market will be the future.

“For sure export market, we are very keen and maybe the next 1-2 years,” he adds.

Titagarh rail systems stocks have been at an all-time high owing to a decent order book of Vande Bharat sleeper and metro coaches. The company is expanding its manufacturing capacity to 850 coaches per annum by FY28 and has announced a capex of Rs 700 crore for the sector. The freight systems remain stable with a 30% share in the segment and it will continue to be the biggest player.

In FY24, the company reported a consolidated turnover of Rs 3900 crore and a profit of Rs 289 crore. Recently, BlackRock Global Funds picked up a 1.6% stake via block deals.

The company looks to have a 60:40 revenue mix from passenger and freight segments in the next five years from about 10:90.
It has tied up with Chinese railways to manufacture stainless steel coaches for the metro and is looking to become the biggest in the country with a capacity of 72 coaches per month. It is also working on backward integration of the propulsion system for the metro, which is now imported.