Titagarh Rail Systems Gives ₹1,527 Crore Shortfall Undertaking for Joint Venture

On August 16, 2024, Titagarh Rail Systems Ltd provided a shortfall undertaking for its joint venture, Ramkrishna Titagarh Rail Wheels Limited (RTRWL). This undertaking, dated August 16, 2024, covers certain covenants related to a term loan of ₹1,527 crore that RTRWL is availing.

The undertaking is proportionate to the company’s 49% shareholding in RTRWL, with the joint venture partner providing a similar undertaking for its 51% share. Notably, the company owns 49% of RTRWL’s equity share capital, and the undertaking was given on an arm’s length basis.

Additionally, Mr. Prithish Chowdhary and Mr. Anil Kumar Agarwal serve as common Directors in RTRWL. While the undertaking is considered a Contingent Liability, it is provided on behalf of a Joint Venture that is part of the consolidated group, with no immediate impact on the company.

Financial Highlights

Titagarh Rail Systems Ltd reported an 8.4% increase in net profit, reaching ₹67 crore compared to ₹61.79 crore last year. However, revenue decreased slightly by almost 1%, dropping to ₹903 crore from ₹910.80 crore in the same quarter last year. The company also saw a 4.1% decline in EBITDA, which fell to ₹101.7 crore from ₹106.1 crore. This revenue drop led to a 50 basis point decrease in the EBITDA margin, bringing it down to 11.2%.

In Q1FY25, the company secured orders totalling ₹350 crore, with ₹250 crore for freight rolling stock and ₹100 crore for propulsion systems. By the end of June, their order book included contracts for 20,300 wagons and 1,592 metro and Vande Bharat coaches.

About Titagarh Rail Systems Ltd

Titagarh Rail Systems Ltd (formerly known as Titagarh Wagons Limited), established in 1997, is primarily involved in the manufacturing and sale of various rail and transportation products. These include freight wagons, passenger coaches, metro trains, train electricals, steel castings, specialised equipment, bridges, and ships. The company serves both domestic and international markets. Titagarh Rail Systems Ltd focuses on freight rolling stock, passenger rolling stock, and shipbuilding. They produce wagons, metro trains, traction systems, warships, specialised defence equipment, and modular bridges.

On August 19, 2024, the share price of Titagarh Rail Systems Ltd opened at ₹1,450.10, touching the day’s high of ₹1,488.70 as of 10:09 AM on NSE.

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