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
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BUSINESS INDIA u THE MAGAZINE OF THE CORPORATE WORLD Corporate Reports Betting big on mobility PHOTOS: SAJAL BOSE 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- Titagarh Wagons 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 Indian Railways 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. Kolkata-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 MEMUs 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 u 48 u NOVEMBER 16-29, 2020 BUSINESS INDIA u THE MAGAZINE OF THE CORPORATE WORLD Corporate Reports 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.