Texmaco Targets 12-13% EBITDA Margin by FY'26

Kolkata, May 19 (PTI) Engineering major Texmaco Rail & Engineering Ltd on Monday said it is targeting an EBITDA margin of 12-13 per cent by March 2026, up from 10.3 per cent in the 2024-25 fiscal, driven by improved operational efficiency and business restructuring initiatives.

The margin in the last two quarters was lower due to a number of factors, a top company official said.

“The company is continuously improving its margin. We are aiming to increase the EBITDA margin level to 12-13 per cent by the year-end. In FY'25, we achieved an EBITDA margin of 10.3 per cent, up from 9.5 per cent from the previous fiscal,” Managing Director Sudipta Mukherjee told PTI.

“The margin in the last two quarters was lower due to various factors such as unfavourable product mix, one-time provisioning of Rs 11 crore, and a Rs 5-crore expense for a long-term vision study undertaken in Q4,” he said.

Mukherjee said the margin performance is expected to improve after the demerger of Kalindee, a loss-making unit under Texmaco EPC, which has been impacting overall financials.

“The demerger process is underway, and we expect it to be effective during the current fiscal,” he said.

The company is also in the process of merging Texmaco West Rail Ltd (formerly Jindal Rail & Infrastructure Ltd) with Texmaco Rail & Engineering Ltd. This transaction is currently awaiting approval from the National Company Law Tribunal (NCLT), and is expected in the second quarter of 2025-26.

Meanwhile, Texmaco reported a 13.5-per cent year-on-year decline in consolidated net profit to Rs 39 crore in the March quarter, impacted by lower margins and supply constraints, despite higher revenues. Revenue from operations in January-March rose 17.6 per cent to Rs 1,346 crore from Rs 1,145 crore a year earlier.

The company attributed the sequential drop in profit and margin to a short supply of wheel sets from the Rail Wheel Factory, which disrupted freight car deliveries during the quarter. Texmaco delivered 2,597 freight cars in Q4, down from 2,714 units in Q3.

During the reporting quarter, Texmaco signed two global partnerships — one with European firm Nevomo for high-speed rail technology and another with US-based Trinity Rail — to expand its international footprint and rolling stock manufacturing capabilities.

The company is also progressing with the transfer of its Infra-Rail and Green Energy businesses into a wholly owned subsidiary, aimed at streamlining operations and unlocking long-term value.

For the full financial year, Texmaco reported a consolidated profit after tax (PAT) of Rs 249 crore, up 120.3 per cent from Rs 113 crore in FY'24. Revenue rose 45.8 per cent year-on-year to Rs 5,107 crore.

Its order book stood at Rs 6,766 crore as of March 31, 2025. The company delivered 10,612 freight cars during the year, registering a 51 per cent growth over FY'24.

“The Government of India's long-term goal to increase the railway's share in national logistics from 27 per cent to 45 per cent by 2030 presents significant opportunities for rail manufacturers. Around 1.2 lakh wagons are expected to be delivered by 2025,” Mukherjee said.

“With an annual production capacity of 13,000 wagons, Texmaco is ready to capture its fair share of this demand,” he added.