With experience in delivering vessels for the Indian Navy, Coast Guard, ocean research, as well as exports, Titagarh Rail now plans to scale up its presence in this sector by setting up new shipyards on both the eastern and western coasts of India.
“Considering the policy initiatives of the Indian government, as highlighted in the Budget, our board has decided to expand our shipbuilding capabilities. We have the necessary pre-qualifications and expertise, making this a logical next step for growth,” Chowdhary stated.
The company had previously put its shipbuilding investments on hold to focus on passenger rail systems but now sees an opportunity to develop the maritime business as its next growth engine.
Also Read | Titagarh Rail announces foray into two new business verticals, including shipbuilding
Titagarh Rail currently holds an order book of approximately ₹300 crore in the shipbuilding segment, building around 10-11 vessels for the Indian Navy. However, these are smaller vessels, and with the planned expansion, the company aims to take on larger shipbuilding projects.
Chowdhary emphasised the vast potential in this sector, given that only a small percentage of inland water and specialised vessels used in India are domestically produced. The government has emphasised the importance of increasing indigenous ship production, providing a significant opportunity for Titagarh Rail.
While the company has appointed a CEO and a dedicated team to lead the expansion, it is still finalising its investment strategy. “We are actively exploring locations for new yards across the country. Once our business plan and capital expenditure are approved by the board, we will announce the details,” Chowdhary said.
Revenue generation from the shipbuilding expansion is expected to begin immediately, though meaningful contributions will take two to three years. The next six months will focus on finalising infrastructure plans, followed by an intense phase of order book building over the subsequent 12-18 months.
In addition to shipbuilding, Titagarh Rail is expanding into the safety and signalling systems sector. Already a leader in the freight segment and making strides in the passenger rail business, the company aims to establish itself in this critical area of railway infrastructure.
Also Read | Titagarh Rail wins order worth ₹537 crore from Ambuja Cements and ACC
The company has revived its joint venture with Mermec, a leader in this field, and has already begun participating in tenders. With a significant portion of the railway budget allocated to safety and signalling, Titagarh Rail sees this as a promising avenue for expansion.
Discussing recent operational challenges, Chowdhary acknowledged that the October-December 2024 quarter execution was impacted due to delays in wheelset supplies from the railways.
To resolve this issue, the government has taken a historic step by awarding a contract for a new wheel plant, being developed jointly by Titagarh Rail and Ramakrishna Forgings. The plant is expected to commence production by 2026, while in the interim, railway production of wheel sets is expected to normalise by March or April this year.
The company, which has a current market capitalisation of ₹10,005.59 crore, has seen its shares lose more than 23% over the last year and are currently trading at ₹743 as of 12:46 pm on the BSE.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
