Titagarh Rail Systems Ltd joined the list of a handful of companies out of Bengal to cross the market capitalisation of Rs 10,000 crore earlier this week. However, the company’s vice-chairman and managing director Umesh Chowdhary said TRSL was only at the cusp of a transformation which would play out over the next two years. The company recently won multiple orders for metro coaches, Vande Bharat coaches, forged wheels among others. In a conversation with Pinak Ghosh and Sambit Saha of The Telegraph, Chowdhary shared his aspiration to enter the railways component business and make Bengal a manufacturing export hub for passenger coaches. An edited excerpt:

The company has taken up a new identity earlier this year. What are the projects in hand for the company?

The company has changed its name from Titagarh Wagons to Titagarh Rail Systems to reflect its expanding gamut of operations across the railways ecosystem. In 2018, our annual turnover was around Rs 300 crore. Now we have a revenue of around Rs 1,000 crore per quarter. We have two core business verticals in the company today — FTRS or freight rolling stocks which include wagon manufacturing and foundry business and PRS or passenger rolling stocks. As of 30th June, our order book was Rs 27,890 crore of which 51 per cent is in PRS and 49 per cent in FTRS. The PRS order book includes the Vande Bharat order of Rs 12,716 crore and also the metro projects.

During the first quarter, we also received a Rs 857-crore order for supplying 72 metro coaches for the first phase of Surat Metro Rail. The FTRS order book includes forged wheels order amounting to Rs 6,300 crore. For Vande Bharat, we have tied up with Bhel and for forged wheels, we have formed a joint venture with Ramkrishna Forgings. So the entire focus for us is now towards executing our current order. But at the same time, we are also exploring other opportunities in the railway components segment.

In order to execute this, the company has to scale up capacity. What is the expansion plan?

The next two years will be a transformative period for the company and we have to develop our capacity and capabilities. On the PRS, we currently have a capacity of making around 12-15 coaches per month. The plan is to take it up to 70-72 coaches per month by 2025. On the wagon side, we are looking to scale up our capacity from 700 wagons per month to 1000 wagons per month. We are expecting the wheels plant by the joint venture company — Ramkrishna Titagarh Rail Wheels Limited — to be operational by 2025. There will be an investment of Rs 1,500 crore in the factory. The location for the plant has not yet been finalised but we are looking at options where logistics costs will be favourable and the project gets incentives.

Where does Bengal feature in TRSL’s expansion plan?

My comfort level definitely is in Bengal. About 95 per cent of our production capacity is in the state. A substantial part of our current order book on the PRS side, including Vande Bharat and metro coaches, will be made from our plant in Uttarpara. I would argue that TRSL is one of the few manufacturing companies successfully operating out of the state. However, in the future, we will look at alternative locations both within the state and outside as we scale up our capacity.

At the beginning, you mentioned the company looking at opportunities in the railway components segment. Could you elaborate on this?

Railway components are a big opportunity. During the life cycle of an asset of around 30-35 years, there would be a requirement of replacement of about 3-4 times. We are looking at least nine different areas that we can explore. The plan is to look at opportunities in areas where we have the strength and where we can generate margins. In three months’ time, we will have a strategy in place as to how we can expand in the components space.

Are you going to look at partners for the same?

Yes, it will be horses for the courses. If a technology partner is required for a particular component, we will take one. If there is a need to form a joint venture, as we did with RKFL, we will do so. There is a massive opportunity in manufacturing in the country, given the Centre’s focus on Make-in-India.

The company raised Rs 300 crore from Smallcap World Fund. Do you think it made other investors sit up and take notice?

Smallcap World Fund is part of the Capital Group, which manages assets of over $2.6 trillion globally. Their investment in the company is a big boost for us and is itself a branding for the company. While the company does not immediately need any capital, since they decided to enter, the entire investment community has started taking notice of us.

Will TRSL also explore the export market?

We already have a significant presence globally through our Italian joint venture. The broader vision that we have for the company is to become a considerable export player from India. Besides wagons and coaches, we anticipate a substantial export opportunity for forged wheels even after meeting the off-take requirement of Indian Railways.