BUSINESS u THE MAGAZINE OF THE CORPORATE WORLD Corporate Reports Betting big on mobility PHOTOS: SAJAL BOSE SAJAL PHOTOS: in modern commuter railway technol- ogies – in 2015 has helped the com- pany to achieve this goal. Today, TWL offers complete solution in mobility – whether it is wagons, passenger trains, ships or bridges. “Our strength is tech- nology. We are the only company in India to make both, freight and passen- ger rolling stock,” adds Chowdhary.

A strong diverse portfolio All these activities of the company have not gone unnoticed in the indus- try. TWL has surprised the industry by outbidding large overseas and domestic players in passen- Umesh ger rolling stock manufactur- Chowdhary: ing and won the R1,200 crore metro rail order is order for designing and man- a big boost ufacturing of the aluminium metro rail coaches for Pune Metro in August last year. It was a big boost for the company, mak- ing it a new entrant in metro coach making. TWL, the R1,765 crore entity, has today built a strong diverse port- firms up its position in passenger mobility folio in freight & components, tran- sit & propulsion, as also engineering & shipbuilding, of which freight he wagon industry has been “The scope becomes limited when you alone contributes 70 per cent of the struggling with capacity utili- are dependent on one particular seg- company’s revenue. Tsation, due to the volatility in ment,” explains Umesh Chowdhary, The TWL story is remarkable in its orders from the over vice-chairman & managing director, ability and has built through acquisi- the few years. The decline of the eco- TWL. “So, we had taken a strategy to tion. Its founder J.P. Chowdhary had nomic growth had also reduced the de-risk the company from wagon busi- begun his career working in Silcoorie wagon order by private players in core ness and set our footprint in other tea estate in Darjeeling as an account sectors. However, the order volume related avenues, with our vast experi- assistant. He then moved to Calcutta from private sector is lower than the ence in engineering”. The acquisition and joined Bhartia Electric Steel Co railways. The intense competition and of the Italy-based Firema – a pioneer (BESCO), a steel casting company, for high input cost have added woes to the the Indian Railways. His commitment wagon industry. While many manufac- SHAREHOLDING PATTERN and knowledge about operation helped turers were going through uncertain- (as percentage, on 30 September 2020) him to rise from being accountant to (%) ties, Titagarh Wagons Limited (TWL), a Others CEO of the company. -based, listed company, which 2.26 Always on the lookout to be an is also the country’s largest wagon entrepreneur, Chowdhary was seek- manufacturer, has quietly focussed on ing business opportunities and soon developing new specialised wagons for Individuals Promoter found a closed foundry division of Bri- 45.70 modern application, thereby strength- 35.57 tania Engineering, owned by the gov- ening its competitive advantage. ernment at Titagarh in the northern The company has also thought- part of Calcutta. He acquired the unit fully forayed into the emergent pas- Foreign in 1982 and started producing railway senger rolling stock segment in the portfolio castings, such as bogies and couplers, last few years. It has been manufac- investors in the name of Titagarh Steels. Later, 3.66 Body Mutual funds turing EMUs, and coaches, corporate 9.02 in 1994, he acquired Titagarh Paper while also refurbishing metro coaches. 3.79 through BIFR, but it turned out to be a

u 47 u NOVEMBER 16-29, 2020 Corporate Reports BUSINESS INDIA u THE MAGAZINE OF THE CORPORATE WORLD misadventure. When the government only Indian company, which has its abolished import duty on paper, the own design, drawing and technology plant became unviable. for high-speed trains. So, apart from A man with full of ideas and sharp the cost advantage, we also have com- business acumen, Chowdhary started plete control of the value chain from making crossing component for rail- concept designing up to after-sales ser- ways. The big change came when he set vices or AMC.” TWL acquired Firema up a wagon manufacturing unit, as a five years back from the Ministry of part of his forward integration moves, Economic Development, government with a production capacity of 180 wag- of Italy, for €50 million to strengthen ons a year in 1997. He used his canny the company’s exposure in passenger business sense and lower overheads to division. Firema SpA has a proven track flourish – so much so that, today,TWL record of high-speed, double and sin- is the largest wagon-maker in the coun- gle decker trains, EMUs, metros, LRTs, try, with a total capacity of 8,000 units DMUs, propulsion system, etc. It is the per annum. The company also entered second largest rolling stock manufac- into diverse portfolios. The 79-year-old turer in Italy having a capacity to pro- Chowdhary is now a patriarch,his son duce 60 coaches per month. Umesh, 46, involved in the day-to-day business activities being the driving Aluminium coach building force for the company’s growth. He is TWL is now investing R100 crore at its also the honorary consul of Switzerland existing unit in Uttarpara in West Ben- in Kolkata. Umesh’s son 19-year-old gal to make aluminium coaches for the Prithish, a second year BCom student, Pune metro. The Uttarpara unit, spread is now learning the nitty-gritty of the Prithish: learning the business over 32 acres, was set up in 2005 to business from his father and also seen make EMUs and MEMU coaches. The in the power corridors in Delhi in the aluminium will be used to make metro land, which was a part of the heavy company of his father. rail coaches in India,” informs Sandeep engineering division of Hindustan The Pune Metro Rail order received Fuller, CEO, Transit & Propulsion, TWL. Motors, was acquired from Birla. The by TWL was for 102 ultra-modern alu- “Each coach is lighter by five tonnes and construction work for the new unit minium-bodied metro rail coaches. reduces the energy consumption sub- for aluminium coach manufacturing A total 34 sets of three coaches each. stantially”. The trains are designed to get is in full swing. It will have capacity Total order value R1,200 crore. A con- up to a speed of up to 80 km per hour. to produce 20 coaches per month and sortium of TWL and Titagarh Firema The use of aluminium for passenger roll- will ramp up gradually. “Initially, nine Spa, its wholly-owned subsidiary in ing stock car body is the most updated coaches will be made in Italy; then, we Italy, emerged as the lowest bidder technology worldwide for high-speed will make them in Uttarpara. The first for the project at a tender issued by trains and metros. It is corrosion and train is expected to be delivered in June Maharashtra Metro Rail Corporation vibration resistant and gives an excel- 2021. Making the aluminium coaches (Maha-Metro). The two lanes of metro lent aesthetic finish. It has a life span of is a high-precession job and our peo- together would cover 32 km. The pur- 35 years and will cost less to maintain, ple are picking up the knack to do it,” ple and aqua lines are expected to be in comparison to the steel body coach. says Fuller, a veteran in the rolling operational by 2021 and the project “Firema’s advance technology has stock industry and former managing cost would be R11,500 crore. given us an edge for the metro rail director, Texmaco. The state-of-the-art “This is for the first time that order,” argues Umesh. “We are the facility will have computer simulation.

FIVE YEARS’ CONSOLIDATED RESULTS (R crore) Revenue EBITA PAT 51.93 57.96

22.43 154.96 137.03 128.10 1,766.32 1,739.19 -25.19

1,559.29 54.63 -147.23 1,271.44

976.65 -67.19

FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20

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The unit will have a dynamic test bed to comply with the safety and comfort parameters, including other charac- teristics of the rolling stock. In future, TWL has plans to use this large facility for making coaches for export. “We required high-end technology to get into high-speed train making,” informs Umesh. “Either we needed to have a JV partner or a technology part- ner. We decided that, instead of going for a technology tie-up, we would rather control technology. Hence, we gained access to the technology and robust manufacturing base of Firema”. He expects to participate in more such tenders in future. The current politi- cal situation being what it is, partici- pation of low-cost Chinese companies in Indian projects has now become Core team: (L-R) Singhania, Agarwal, Fuller, Mukherjee, Kandoi uncertain, which will benefit the domestic players. to its then existing foundry business. and has been developing new prod- “The passenger train is a high-tech- The integrated wagon unit in Titagarh ucts, based on the technology advance- nology segment and an opportunity to is the centre of excellence spread across ment for better margin. “We are the grow in this segment is enormous,” says 50 acres on the bank of Hooghly River first Indian multinational company to Umesh. “The total anticipated demand and also connected to the railway track. come up with its own rail freight wagon of metro coaches in India today is This mother wagon unit has a capac- designs in the sector of automobile, 10,000. Valued at R30,000 crore, it is ity to produce over 5,000 units a year, steel, cement, multi modal and higher a great opportunity coming up in the with full design flexibility, primarily capacity flat wagons,” informs Sudipta next 4-5 years.” There are three other for the Indian Railways and also for pri- Mukherjee, director, TWL. “Some of large players – Bombardier, BEML and vate companies by skilled workmen. Its them have been approved and are in Alsthom – active in the country mak- Bharatpur unit in Rajasthan is having a advance stages of consideration with ing metro coaches. rated capacity of 3,000 wagons per year. Indian Railways”. TWL offers large port- Firema may have given Titagarh the The combined capacity at Titagarh and folios like flat wagons, hopper wagons, modern technology and ready market Bharatpur makes TWL the largest wagon tank wagons, box wagons, automobile access in Europe, but it has also put a manufacturer in the coun- wagons, brake wagons, spe- stress on TWL’s books. A legacy con- try, with Texmaco coming SEGMENT WISE cial purpose wagons, cov- tract which the company had to exe- as the second. In the cur- REVENUE (R crore) ered wagons, etc, used by cute had led to the company incurring rent year, TWL received all sectors of the industry. losses and debt piling up. “We are now the highest wagon order In the two large steel going through a proper rearrangement from the railway of 1,800 1,700 casting foundries, the com- of the operation,” says Saurav Singha- units, valued at R500 crore. WAGON & COACHES pany make components like nia, vice-president, strategy & man- It covers 47 per cent share bogies, couplers and draft agement services, TWL. “There was a of the total order of 3,800 gears for rolling stock. “All thorough management overhaul, with units. The company has 22.12 our products go through a new CEO being appointed and several also secured 40 per cent stage wise stringent qual- SPECIALISED EQUIPMENT cost reduction initiatives implemented of the total 1,265 units of ity parameters before they & BRIDGES to improve margins of new orders. The non-railways orders. roll out the factory,” affirms EBITA turned positive in 2019-20, from Mukherjee. a loss of €6.33 million in 2017-18”. Contrarian strategy 25.20 The Indian Railways has TWL today has five manufacturing The recession for last a fleet of 260,000 wagons. facilities. Two units are in Titagarh – one few years and the pres- SHIPBUILDING Freight contributes 60-65 for wagon, shipbuilding and engineering ent slowdown for corona of the railway’s revenue. and, the other, for foundries. Uttarpara virus have affected the freight rolling The industry expects the dedi- is for passenger coaches. Bharatpur in stock demand, resulting in a decrease cated freight corridors will lead the Rajasthan is for wagon and maintenance in the order book from railways, as also growth of the railways by 15-20 per and the fifth, a wholly-owned over- private players. TWL has embarked on cent by 2021. seas subsidiary called Titagarh Firema is a contrarian strategy in slowly expand- TWL is now moving into green in Italy. TWL ventured into the wagon ing in a bear market. The company is energy in all its facilities in West Ben- business in 1997, forward-integrating always at the forefront of innovation gal. This will effectively replace 25 per

u 49 u NOVEMBER 16-29, 2020 Corporate Reports BUSINESS INDIA u THE MAGAZINE OF THE CORPORATE WORLD cent of its current annual electricity with clean energy expected to be com- missioned by 2021. The initiatives to reduce the carbon emission has been mooted by Prithish, who managed to convince the management that green energy is no longer an option but a global imperative. “Apart from a sig- nificant reduction in our carbon foot- print, solar power is also cheaper than grid electricity and is a valuable com- mercial proposition for manufacturing firms that are energy-intensive. “We expect to see substantial saving in our annual power costs through the use of solar energy,” informs Prithish, vice- president & management co-ordinator. The solar power unit cost will be only TWL is the largest wagon maker in the country half of the power from grid. The com- pany is likely to save R1 crore a month. years due to adverse market condi- Broadening of business horizon by tions, both in domestic as well as over- taking advantages of its fabrication skill seas. The right focus on business and in wagon-making, TWL had entered improvement of demand environment into a small-sized specialised shipbuild- should help the company’s fortune. It ing venture three years back in Titagarh. can also reap the benefits from its over- The company has successfully man- seas subsidiary.” The present market ufactured and delivered four ships to cap of TWL is R490 crore. Indian navy and also several coastal During the six months to Septem- research vessels for the National Insti- ber 2020, the company’s revenue had tute of Ocean Technology (NIOT), under declined to R646 crore, as against R921 the Ministry of Earth Science – the total crore in September 2019. It has recorded order value was to R350 crore. The 72 m a loss of R18 crore, as against a profit of 1,000 tonne oil tankers for navy were R17.28 crore during the corresponding the largest yard craft included by Navy. Artist’s impression of the Pune metro train period. “The Covid pandemic has hit Two NIOT research vessels are 32 m long the industry badly. Italy was the worst and have three on-board laboratories opportunity in railway is robust. But, effected country in the world at one with more than 45 different types of sci- with the growth, TWL needs to manage time, with its operations shut down for entific equipment to monitor deep sea the company professionally.” four months,” clarifies Umesh. parameters. “Our focus remains on the The company has spent a significant specialised vessels,” says Saket Kandoi, Future-ready plants amount in R&D in Italy. It is now plan- senior vice-president, Transit & Ship- “For the last four years we have ning to set up a design centre in India. building. “We have also participated in upgraded our plants for making them The idea is to develop competence in various tenders for defence and expect future ready,” says Anil Kumar Agarwal, India and develop Indian engineers to get more such orders”. chief financial officer,TWL . “Opera- to be able to take up future projects in TWL, the licensed partner of Mat- tional efficiency, working capital man- India. “We are searching for a place, iere, France, for modular steel bridges, agement, simplified corporate structure where availability of technical experts is has built more than 100 bridges in and diversified product portfolio have found easily,” says Prithish. India and Nepal. Recently, it has won helped us to improve operational prof- TWL’s thrust is on mobility. It has the order from the National Highways itability. Our net debt for Indian oper- entered several new areas and has set and Infrastructure Development Cor- ation reduced to R50 crore from R450 up a robust system. “The Indian Rail- poration to build bridges in Manipur, crore in 2018”. He expects the Indian ways is proactively moving towards which are pre-designed, with inter- operation to be net debt free by the cur- privatisation, particularly in roll- changeable components and quick to rent financial year. As far as the debt ing stock business,” says Umesh. install. They are light and therefore relating to overseas operations, it may “We have been investing in tech- easy to store and transport. The present take few more years depending on the nology, processes and people. Now, order book is above R50 crore. business plans. the challenge for us is to manage “The company has risen from a Kunal Seth, analyst, B&K Securities, the sustainable growth and take the small level and is growing gradually,” who has been tracking the company, company to a new height”. u says A.K. Vijay, finance director, Tex- predicts: “The company had been fac- SAJAL BOSE maco, commenting on TWL. “The ing difficult times over the last three [email protected]

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