Thank you, Anushka. On behalf of Titagarh Rail Systems Limited, I extend a very warm welcome to all the participants on Q3 and 9 months FY26 financial results discussion call.

Today on the call, we have Mr. Umesh Chowdhary, Vice Chairman and Managing Director; Mr.

Anil Agarwal, Deputy Managing Director; Mr. Pritish Chowdhary, Deputy Managing Director; and Mr.

Saurabh Singhania, Chief Financial Officer, to provide the operational and financial insights. Before we begin the call, I would like to give a short disclaimer.

This call may contain some of the forward-looking statements which are completely based upon our beliefs, expectations, and opinions as of today. These uncertainties are not a guarantee of our future performance and involve unforeseen risks and uncertainties.

With this, I would like to hand over the call to Mr. Umesh sir for his opening remarks.

Thank you.

Thank you, Prachi, and a very good afternoon, everybody, and thank you for joining the Q3 FY26 earnings call. Before I get into the questions, which I'd be very happy to answer along with my team, I would just like to give you certain perspective, highlights of the quarter.

The quarter, in terms of the two businesses of the company, the freight rail systems and the passenger rail systems, the freight rail systems, if you see on a year-on-year basis, as the overall revenue has been muted from 800 crores to around 600-odd crores has been the overall revenue for the freight rail systems. This was primarily because of the wheelset problem that was sorted out, but has been a little bit of a seesaw in the sense in the last month of the quarter again there was a problem of the wheelset.

Overall industry production has been Hello?

Overall industry production has been impacted.

My deep apologies, the line got disconnected. I was mentioning about the overall situation on the freight rail systems.

In the Q3, again there was a little bit of a seesaw on the wheelset and supply chain of the freight business. Overall industry performance has been impacted, and we were no exceptions.

There was a type-wise mismatch between the 840 dia wheel and the 1,000 dia wheel between production and requirement of the industry. Of course, it has again normalized from the current quarter, but this is a bit of a seesaw which is going on.

We see that going forward by March, we are expecting to start trial production of our joint venture for the wheelsets. Maybe in another quarter or so or a couple of quarters, our internal wheelsets is going to get fully available to us, we should not have problems on wheelsets.

Having said that, now the wheelset production has again normalized, and for the private wagon, we have also started importing some of the wheelsets, we should be able to recover to an extent the lost production of the last quarter. The silver lining for the quarter has been that the passenger rail system, which constitutes on a standalone basis at almost 75-plus percent of our order book, has shown a huge jump.

We have grown our revenue from 40 crores to 40-odd crores to 160-odd crores, and the EBITDA has also jumped from about less than 5 crores to about 22 crores, which is very reflective of our strategy of growing the passenger business. We are continuing to ensure that we stabilize and grow this business.

Going forward, maybe in about a year, two years' time, we clearly see that the passenger business will be the dominant part of our overall business between the two, which is the passenger and the rail, and which is quite well supported not only by the order book, but also the tailwind in the industry. Some of the highlights of the quarter, we were able to flag off the first train for Ahmedabad Metro by the honorable Chief Minister of Gujarat, who visited our plant to flag off this rake, very well received.

Now the series production of Ahmedabad Metro has started. The other highlight of the quarter is we have been awarded the wagon leasing license, this will further strengthen our presence in the private sector wagon market.

We'll be able to offer wagons on lease to some of the important customers. This also would mean that we would be able to make an entry into the wagon maintenance market, which effectively would be, as we understand based on our interactions and based on the reports, that will be initially open for the private wagons which are offered on lease or owned by the private customers.

In this case, through the leasing license, we will be able to own and maintain the wagons as well. The demerger of the shipbuilding business has been completed, and I thought we'd already announced the order that we received for the coastal research vessel.

That business is picking up very well, and we expect that it's a 100% subsidiary now, but that business is going to pick up very well, and there is a lot of tailwind available in that business. The first propulsion set for EMU has also been approved by RDSO, and the company has an order book of about close to 500 crores on propulsion, and this also is going to start kicking in into the revenue from FY27 onwards.

The other highlight that I would be happy to share is the agreement that we signed with ABB. As we had reported a couple of years ago, we had signed an agreement with ABB to get the transfer of technology for the 750 kVA TCMS system, which has been used in the Gujarat Metro.

This agreement further expands that and gives us the transfer of technology for the 25 kVA. There are only two type of Metros that operate in India, which will complete our ownership range of the TCMS.

This is another very important building block in our overall business which we are being able to complete so that the idea is that on the passenger rail system business, like we did in the past for the freight rail system business, we should be very integrated. We should have a complete grip over the value chain, right from the critical components up to the service.

This gives us a big leverage on having a grip over the value chain. This also includes that we will be producing some of the traction motors and traction converters in our own plant.

We already have the production set up where we are producing the traction motors for the locomotives and also for the EMUs, which I mentioned a little while ago. This will also have a transfer of manufacturing from ABB for their production standards and production technologies for the traction converter and traction motor for the Metro business.

The last but not the least is that the aluminum Metro line is being established. The project is already on way, and we should be able to complete it by Q2 of FY27.

Earlier, we used to get flat packs or sub-assemblies from Europe and then do the final Metro coach manufacturing assembly in India, but this again would give us a backward integration, and we'll be able to manufacture end-to-end aluminum Metro coaches right from the raw material or extrusions upwards to the complete Metro coach. This would also enable us to make car bodies and aluminum coaches for high-speed or semi-high-speed trains.

We are preparing ourselves for the massive investment that the government of India has announced under the high-speed network. The idea is to also use this line to further expand and progress ourselves to be able to do high-speed trains in the future.

This is overall picture, and then I'm happy to take any questions that may be there. Thank you.

Good evening, sir. Thank you so much for the opportunity.

Sir, my first question, in passenger coaches side, we have seen significant improvement on the execution side. In this quarter, we did nearly 18 Metro cars compared to last Q3 around 3 Metro cars.

Overall in this 9 months FY26, we did 39 Metro cars. We have guided 100 to 120 Metro cars as our aspirational target by FY26.

I'm trying to understand whether in Q4 we can make it 20, 25 additional Metros, we can end up 60, 65 kind of range. If you could share more details because we are running multiple projects concurrently, especially Pune aluminum, Gujarat, Mumbai, Bangalore, and Vande Bharat.

Could you please share a detailed timeline of the production ramp-up of each major program?

Sure, absolutely. Thank you for your question.

Now, let me explain this to you that the target that we had set for ourselves this quarter this year was between 100 to 120 cars. There is a significant improvement that we have made, as you have as you have already noted.

We may not be able to get to 100 or 120, but we'll be pretty close to that, which in itself will be a very Can I request to go on mute, please, because I'm listening to myself again?

Yes, sir.

Yeah. There will be a significant improvement that we will see in the Q4.

We have already started ramping up. In January, we were much higher than what we were in December, and we are looking at continuing the trend in February and March as well.

As far as the Pune is concerned, Pune is an aluminum Metro coach, and as I mentioned that the production of that will start only after completion of the project or the line that we are setting up for the aluminum coach, which will be somewhere in Q3 of this The car body production will start in Q3 or Q4 of this financial year of the coming financial year. Vande Bharat production has already started.

We expect by the end of this financial year, that is March 2026, to be able to complete the car bodies of the first train, which is 16 cars. We are already in production and which will be again a milestone.

The first train is likely to be ready in the Q3 of this financial of the coming financial year, I'm sorry.

Sir, Gujarat, Mumbai, and Bangalore, that update?

Bangalore is continuously being executed, and Gujarat now has started execution. Mumbai will start execution from Q3 of the next financial year.

Sir. Sir, my next question, I think we have received approval for wagon leasing company.

I'm trying to understand what is the initial fleet size target and what is the expected leasing yield on wagons under this scheme? Whether this is the asset-heavy model requiring significant debt funding, or is there any different capital structure?

How do you look at in this business in terms of revenue and margins for next 3 to 5 years?

This is a business which will be a part of our existing company itself, and we are looking at this as expanding our offering to the customer. Primary business would continue to remain sale of or offering of wagons.

This is only an enabler to increase our market share in the private sector wagon business. As far as the other details that you have mentioned, this will be blended along with our overall margins, and we will not be looking at it as a separate business in the sense of buying wagons and then leasing them.

This is only an extension for our own product offering, and maybe a stronger bridge between us and our existing and potential customers.

Sir. Sir, my last question, defense and bridges order book nearly 38 crore.

I'm trying to understand what kind of order book is this and how do you take this business over next 3 to 5 years, whether we have opportunities of 5,000 500-plus crore kind of revenue maybe next 3 to 5 years? What kind of opportunity size we have?

Secondly, Titagarh Naval Systems Limited, are we planning to list separately once it reaches on sizable scale?

As far as the defense is concerned, we have already announced that this is something which is under evaluation of a board committee. We will then, at an appropriate stage, once the board has decided on the way forward, we would definitely announce that to the market.

For the Titagarh Naval Systems, also I had already mentioned in the interactions over media and otherwise, we are going to build this business, and yes, the idea would be to separately list this company at an appropriate stage. When that will happen, the timing is something which is not yet clear, but we will definitely build the business before we take that step.

Sir, you can also elaborate more specific opportunities on defense and bridges segment side.

I already mentioned, sir, that it is a board-level committee which has been constituted. Once the deliberation is finalized, and once we have a clear approval of the board, we will definitely announce that to the market.

Thank you so much for the detailed explanation, sir. All the best.

Thank you.

Hello. Sir, am I audible?

Yes, sir, you are audible. Please go ahead.

Yeah. Yes, sir.

My question was with regards to the new facility for components. When it will be commissioned and when the line for backward integration you're planning?

It is already going on, sir. Both the expansion in terms of the aluminum that I mentioned, the backward integration for all the car body components, and also the test track, which is going to be a big game changer for us, even for our ambitions to get into the high-speed or the bullet train segment, the 1.6-kilometer test track.

All of that work is going on at full pace, and we expect all of these projects to be completed in the first half of the next financial year.

First half of the next financial year. Okay.

The orders from Vande Bharat will be contributed from next financial year, or you're expecting some of this to start by this quarter?

No, the dispatches will start only next financial year, but the production is already started. As I mentioned that we would have almost completed the entire car bodies for the first train within this financial year.

To that extent, being a percentage of completion accounting, some revenue will likely flow in this quarter as well, in this year itself also.

Okay. As you mentioned, the wheel shortage is now normalized.

Can we expect to see a significant jump in top line and as well as bottom line considering the low base of it?

We would not like to give a forward-looking statement, but definitely you see the capacity of the wagon, as far as freight rail system is concerned, the company is not limited by capacity. We have set the backward facility also, the foundry facility, to be able to produce 1,000 wagons a month.

The only constraining factor is the wheelset. Of course, now we are hoping that the future orders or future tenders come in, which we hope should come out in the early part of next financial year.

I had mentioned that we are having workload till about first half of the next financial year, but beyond that, we are hoping the new tenders to come in. On the new tenders, I'm sure that this question would also come up, maybe I'll answer it in advance, that railway's target of achieving the 3 billion ton of freight loading by 2030 remains intact, and so does the target of attaining 40% market share in the overall logistics of the country, which is currently about 25%, 26%.

While there may be some blips in the requirement over one or two quarters, but on the mid-term basis, I would say that the demand for wagons, we do not see them to become a challenge, and we are fully ready to be able to cater to that demand at the rate of 1,000 wagons if there is enough business in the market. The growth in terms of the ramp-up will really start coming in from the passenger segment, which is already started seeing a ramp-up.

Next year, FY27 and FY28, are going to be the defining years wherein the real ramp-up of the passenger rail system is going to happen, both in terms of the Metro segment, in the Vande Bharat segment, as well as in the propulsion segment. Understood, sir.

What's your current order book? That valuation?

It is there in the presentation, yeah.

Okay.

Yes, sure.

Hi. Thank you for the opportunity.

I had a couple of questions. First, how much is the backlog of CRRC, the Bangalore Metro?

When are we expecting it to be cleared? Do we see any spillover in FY28?

That's my first. Second, what is our current production run rate for Metros specifically?

The backlog of CRRC is likely to be over in FY27, at most if it does, then it may be spilling over to the first month or first month and a half of the FY28. Bulk of it will be over in FY27.

As far as the run rate of Metro is concerned, we just spoke about it that last quarter we improved, and this quarter we are further likely to improve. Our target is to get to 20 cars per month, which is what we will get within the next few months.

It is a process. It is a new business line which we are ramping up, and there are always teething troubles that are there when you go for such a steep ramp-up.

Most of them we have been able to overcome, and the result is already in front of us, that the ramp-up is already visible. We will continue to pursue this ramp-up and get to 20 cars per month within the next few months.

Thank you. All the very best.

That was very helpful. Thank you.

Hello, sir. The execution has improved to some extent with the availability of the wheelsets.

Last time you had mentioned that the imports have been permitted. Still are we not in a position to execute to the fullest extent?

The import of wheelset takes a little bit of time once we get the orders, and this is only permitted for the NRC or the private sector wagon requirement, not for the wagons that we produce for the Indian Railways. Therefore, even when we start import process, from the day we place the orders till the time we receive the wheels and we are able to use it takes between 4 to 5 months.

That's the reason we were unable to ramp up the production to the desired level. Right now, till we receive the new tenders, to be able to produce round about 800 wagons is what we are targeting per month, and we should be able to get there.

As I said, this was an unexpected blip that we faced from the rail wheel factory. The production had normalized, but then again there were some problems.

This is a very short-lived one.

Our production in the joint venture is expected to start from the next year Q1?

The trial production is expected to start by March or April, and then stabilize by another couple of quarters.

It may be after Q2 only?

It's premature to say. As I said, the trial production will start now, and then to stabilize whatever time it takes.

It can happen in anything between one to two quarters.

Yeah. Regarding this Titagarh Firema joint venture where they held about 41% stake and I think the balance 59% was held by Titagarh, can you explain what is the situation now?

Our share Titagarh's shares in Firema was minority. It was not 50

or

whatever percent you were mentioning, sir. It was a minority shareholding, and then there were other partners also in this.

As far as the what we have already reported,

the

company had run into difficulties. As there were two objectives of investing into Firema.

One was to set up our business in India for the passenger rail systems. As you can very clearly see, that has met with thumping success.

We have an order book of 11,000 crores directly and about another 11,000 crores indirectly through our joint venture with BHEL, that is all in the passenger segment. That has paid very rich dividends.

The second one was to produce in Europe for Europe. That unfortunately could not succeed, and the company continued to make losses.

Considering the opportunities available in India and the difficulties prevalent in Europe, we had decided not to take further exposure. Therefore, now the company the the Italian State Railways have made an offer to buy out that company, and that is a deal which is under progress.

Once it is done, then we will be able to ascertain exactly what will be the status or the losses, but mostly the the entire worst-case scenario or the losses that can happen to the company have been disclosed in our results. Most of it is non-cash, the cash is already spent.

Because as on March Net worth of the If I may just complete, it does not impact our business in India, therefore it is not so much synergistic anymore. Please go ahead, sir.

Huh. Actually,

when I saw the balance sheet of 31st March 2025, it shows that the net worth of the company was some 158-odd crores. Maybe in these 9 months, whatever losses will come, netting out those losses, will there be a positive net worth, and will we realize something after because you had given a guarantee of the land parcel, etc.?

We are not in a position to understand what will happen.

As I just mentioned, sir, now the company has been offered to by the State Railways of Italy to be acquired. We do not expect very large equity payback, or if at all, from the Italian Railways.

What will be the final impact of that, the worst case has been disclosed in our balance sheet. Whatever happens will be better than the worst case.

We are not expecting any significant charges of impairments, etc., happening in our books?

Apart from what has been mentioned in our balance sheet, or in the results. Huh.

They have been already provided, no?

It is there as a part of the results. There is some part of it has been provided and some part of it has been disclosed.

If you go through the details of the financials, you will be able to find that.

In the notes, etc. Okay.

Okay. All the best to you.

Hope we are in a position to have a very good next year, 26-27, because this year has been a very stormy one for us because of the factors beyond our control also. Though we have been on track, we are not in a position to deliver because of certain things beyond our control.

Hope this year and the next 27-28 26-27 and 27-28 will be very good year for us.

We are also very hopeful and optimistic about that, sir. Thank you.

All the best, all the best. Thank you.

Good afternoon, sir. Sir, apne paas mein total order book kareeb-kareeb 28,000 crore hai, 27,755, jismein apna wagons ka hai 3,126.

Yeh apna kitna mahine ka load hai, sir, wagon wala?

Sir, yeh lagbhag hamara jaisa maine abhi kaha tha ki first half of next financial year, we should be able to cater to with the existing orders, and to go beyond, we are looking at the new tenders including the new orders that we will be able to receive on account of this wagon leasing license that we have obtained. Achha, yeh kab tak aa rahe hain, sir, government ke wagon inquiries?

Yeh to hamare haath mein nahi hai, lekin hum jo expect kar rahe hain ki yeh

Expected, expected, sir.

Q1 mein aana chahiye. Jaisa maine kaha tha shuruat mein bhi ki railway ne jo apni targets rakhi thi 3 billion ton traffic carry karne ki, usme kahin pe bhi koi downgrade railway ne nahi kiya hai.

Railway abhi bhi uspe dridh nishchit hai ki woh 3 billion ton traffic 2030 tak carry karegi. Pradhan Mantri ji ne jo vision jo National Rail Plan mein 40% market share logistics mein hoga uska kaha hai.

Aaj bhi ek newspaper mein article hai ki Gati Shakti ke antargat railway ko jo apni share badhani hai aur apne loading badhana hai, uske liye jo jo terminals mein aur jo jo rail network mein unhe investment karna hai, woh cabinet unko clear kar rahi hai ek-ek karke. To mera manna hai ki yeh wagon demand jo hai is 3,000 ton ya 3

billion ton traffic load karne ke liye kaafi healthy rehni chahiye agle kai saalon tak. Ji.

Achha, sir, yeh jo budget aaya uska kitna positive effect hai aur jo trade agreements hue hain unka kya matlab apne isme positive impact rahega ki apna 26-27 aur 27-28 mein kya turnover apan expect kar sakte hain, sir? Sir, jahan tak yeh budget ka sawaal hai, budget bahut hi positive hai.

Main do anshon mein ise divide karunga. Pehla hai hamare business ke liye passenger rail system pe.

Passenger rail system mein jo budget document kehta hai ki naye

Vande Bharat trains lagaye jayenge, unhe enhance kiya jayega services ko. Aur sabse badi cheez jiske upar hamari company kaam kar rahi hai aur kaam karti rahegi, aur bahut focus ke sang hum uspe kaam kar rahe hain, woh hai additional high-speed corridors.

Jo saat naye high-speed corridors announce hue hain kyunki Titagarh ekmatra aatmanirbhar company jise kaha ja sake, Make in India company hai jo ki yeh kshamta rakhti hai ki high-speed train bhi bana sake. Aur aluminum coach jo hum abhi line apna set up kar rahe hain jo ki September ke pehle productionize ho jayega, usme high-speed trains banane ki poori sambhavna hamare paas rahegi.

Aur plus jo humne zameen liya hai aur test track bana rahe hain, usse hum high-speed train ki ore aage badh sakte hain. To yeh budget ke antargat jo hamari ek future road map hai jo passenger rail systems ki, woh kaafi acche tarike se that has been established.

As far as freight is concerned, there have been some media reports about some wagon procurement which is there, which is about 30, 32,000 wagons. The railways have not officially confirmed that to us as of now.

Having said that, as I mentioned ki aaj ke din railway kareeb 1.5 billion ton traffic carry karti hai aur lagbhag 4 lakh wagon unke paas hai, to agar unhe 1.5 billion se 3 billion ton pe jaana hai, to unhe wagons ki to zaroorat abhi kaafi

Mota-moti utne wagon to chahiye hi chahiye. Haan, woh detailed calculation pe to main comment nahi kar paunga, lekin Haan, sir.

Haan, sir. but yeh overall picture hai.

Sir, yeh Madam? I would request you to

No, no, my question has not been fully replied, ma'am. It was budget and trade agreement also.

Trade agreement aur 26-27, 27-28 ka turnover, sir.

Trade agreements ka hamare business mein koi direct impact nahi hai, sir. There is no direct impact of the trade agreement in our business.

As far as the Neither positive nor negative? Neither positive nor negative.

Of course, it does improve the general sentiment, and you see the indirect advantage that we will get that if there is higher GDP growth, which is definitely going to be the case because of these trade agreements, it is going to enhance the GDP growth and the size of the economy. Therefore, there will be an impact on the overall freight loading and thereby on our business.

As far as the turnover growth is concerned, we have already given the order book that is available. We have also given in our strategic plan, which you can download from the website, the way we are looking at moving forward.

While we cannot give you any forward-looking projections as a matter of policy, we have given you the directional framework of how the company intends to go in the next couple of financial year. On the trade agreement, I just mentioned that probably, in terms of if the overall logistics and all of those procurement costs comes down, then there will be some cascading impact or advantages, but there is no meaningful direct impact to us.

Achha, ek chhota sa

question hai, sir. Yeh jo aluminum coach aur SS coach rehta hai Sorry to interrupt, Mr.

Rajesh. Just one small, very small.

Aluminum coaches aur SS coaches wagera jo rehte hain, sir, plus Metro ke coaches, per coach approximately kya cost hota hai, sir?

Metro coach approximately 10 se 12 crore rupaye mein bikta hai.

Haan, haan, sir. Aluminum?

Depend karta hai specifications pe, that will become hypertechnical, I would avoid getting into that,

but it will be more than Metro. Ji, bilkul.

Ji, sir. Ji, sir.

Theek hai, sir. Thank you, sir.

Thank you very much. Thank you.

Thank

Hi, good afternoon, sir. Thanks for taking my question.

My first question is on the passenger business. We have multiple orders now.

Based on your commentary, production on most of them will start at some point in FY27. Are we looking for more orders in this segment, or do we first want to stabilize and start work on the existing orders?

Hi, Parvez. We are absolutely looking at more orders.

In the last six months or less than six months, I would say, we have booked orders of about 4,000 crores for Metros, as you are aware, Mumbai Line 5 and Line 6. We are looking at participating in a spate of tenders that are in the offing.

We are doing both simultaneously. Since you have seen the facility, you have seen the kind of expansion that is continuously going on.

On one side, we are continuing to build up our order book and participating in new tenders and riding the wave of opportunity that this sector presents. Simultaneously, as we keep on building up our order book, we are also enhancing capacities.

Sure. The second and the last question is, in terms of numbers, what kind of order book will we have in the wagon segment now?

Wouldn't it be closer to about 8,000 wagons? We have

not disclosed that number, I'm not sure I can give you that number right now. I will definitely, in terms of the details, we will try to share in the presentation or by way of other addendum to presentations as far as possible.

Sure,

sir. Thanks, and all the best.

Thank you so much.

Sir, as you have mentioned that there is a growth that is coming from the passenger rail segment, and there is a still uncertainty prevailing as far as freight wagon is concerned. By considering all this fact, what kind of, just as not a number, but the growth as far as top line we can expect over next two years?

Second question, sir, what kind of margin that we expect from over next two years in general?

In general, what I can answer your question is what is the potential of the business that is there. As far as the freight is concerned, I do not see uncertainties in the mid-term.

As I mentioned to you that we have orders till first half of the next financial year, and we are pretty hopeful that orders should start flowing in by that time. Considering that the overall freight loading targets are intact, they have not been scaled down by the government, considering that the Indian economy is still growing at a very healthy pace, and considering that the logistics cost of the country has to be brought down, and the railways have continued to invest in building up capacity in terms of track, signaling capacity, locomotives, and all of that, we believe that the wagon demand has to follow.

On a metaphoric basis, a wagon always follows the locomotives, both physically and business-wise. The locomotive production has been ramped up.

You have seen the production numbers. Railways have ordered new locomotives on Siemens and stuff like that.

The wagon demand, we do not see that it'll plummet over a longer period of time. There can be blips over a quarter or a couple of quarters, but not more than that.

That is our expectation. Having said that, the overall potential that we have for the freight wagon of 1,000 wagons a month remains intact or 12,000 wagons a year remains intact.

We believe that the demand sooner or later will come in, and we'll be able to cater to that demand. As far as the passenger segment is concerned, we have very clearly and very explicitly elaborated the growth trajectory that we are envisaging and how we are envisaging that growth trajectory in our strategic plan.

I would request you to refer to that. That will give you an overall view of where the potential lies for this business also.

I can only sum it up by saying that considering even the full potential of the wagons or the freight business, the passenger systems business still has the potential of overtaking substantively the freight business in few years' time from now.

Sir. As far as margin,

freight wagon margins remain stable at 11%, 12%, 12.5% like we have always done. As far as the passenger business is concerned, again, because of the scales, we have always maintained that once we achieve the basic economies of scale, we should be at about 11%, 12%, which is what we are at this quarter.

Going forward, once we have our own propulsion and we are able to fully backward integrate, which is a process that should take us another 12 another two years or so, we will be able to enhance that margin by additional maybe 3%, 4%. Our ultimate target on the passenger side is to be able to get to about 15% EBITDA levels, which will take us maybe another couple of financial years to get there.

Okay. Sir, my second question, that as far as your other vertical is concerned, that is your shipbuilding and maritime system and some of the defense-related that were showing in your current order book, any kind of opportunity you are looking and growth prospects on these two segments?

The shipbuilding business, I mentioned to somebody just a few minutes ago, this a very large opportunity. The government of India is also identified as a key growth sector, and we will be focusing on that in the new company that has been formed to take the business of the shipbuilding forward.

The defense, we have constituted a board-level committee which the strategy for the defense is something which is still under deliberation. Once the decision is taken, we will definitely report back.

Okay. Thank you, sir.

Thank you. Thank you so much.

Hi, thank you for the opportunity. I had a couple of questions to ask.

First one being what is the planned capacity CapEx allocation for FY27, and how will it be funded, say, through internal accruals or debt?

Yes, I'm on the line, but I cannot hear the management.

rejoin.

Hello, can you hear me?

Yes.

I'm sorry, there was a connection problem. Sorry, ma'am, I don't know at what point I lost you or did you hear me at all or not.

I'll start from the beginning.

I couldn't hear you at all, sir.

I'll start from the beginning. The overall CapEx that we had announced for the passenger rail systems to achieve the capacity or the production that we have projected right now was about 1,000 crores.

The CapEx that we are envisaging to make within FY27 is within that amount. Part of it was funded through the equity raise that we had done and the internal accruals, and part of it through the funding through the debt.

There is no new capital requirement per se that will be there apart from the further expansions if we take up. If there are, for example, the expansions for opportunities like high-speed or MRVCs or some other additional large projects that come up, that may take up new CapEx requirements.

Outside that, the current levels that we have, the current orders that we have will be catered to by the CapEx that was already announced, which is underway, and will be completed in the first half of FY27.

Got it. Also, you mentioned about the MRVC tender.

Wanted to understand what additional CapEx needs to be done in the coming years for the timely execution of Vande Bharat and MRVC simultaneously?

We will not be able to speculate on that right now, and it is too premature to say about MRVC or any new tenders that we are participating. These are all opportunities that are there in the market, and there will be competitive biddings in each one of them.

We would only come up with financial estimates of what is the opportunity for us and what is the CapEx requirement, etc., if and when we have been able to successfully win a project. What we can mention is about the Vande Bharat, which is already included in the CapEx I just explained to you about.

Right. Also, are we looking to bid with some strategic partner, or we have the required credentials now to bid individually for the MRVC tender?

We are open to every option. We are evaluating.

These are all complex tenders. There are many aspects that need to be studied.

The tender is still in the pre-bid query stage. Once this is finalized, only then we will be able to say whether we are able to qualify ourselves or qualify with somebody else, and whether we would like to go by ourselves or with somebody else.

These are things that will be getting clearer over a period of time. The pre-bid queries are still not been answered by the customer, and when it's in the pre-bid stage, it would be almost like the tender document discussion stage.

Got it. That answers my question.

Thank you. That's it from my side.

Thank you so much, ma'am.

Thank you very much, Prachi, and thank you for the very insightful questions that were put forward. I hope we were able to answer them.

If there are any further questions that any of the investors would like to have, please feel free to reach out to our investor relation teams, and we would be most happy to answer all of your questions that may be there. My team and myself are always available to do so.

Just at the cost of repetition, we believe FY27 and FY28 for the passenger rail system is going to be a very important year. It is going to be very exciting year.

We will be working on ramping up the production in the passenger rail systems. We are hoping that the freight rail system business also continues to get ramped up by way of the new orders coming in by the railways in the first half of next year.

With that hope and expectation, I once again thank everybody for joining this earnings call, and I hope to interact again soon. Thank you.

Thank you, everyone.

Thank you.