Texmaco Targets 12-13% EBITDA Margin by FY26 with Strategic Initiatives

Kolkata: Engineering major Texmaco Rail & Engineering Ltd has set an ambitious target of achieving an EBITDA margin of 12-13% by March 2026. This is a significant increase from the 10.3% EBITDA margin recorded in the 2024-25 fiscal year, driven by improved operational efficiency and business restructuring initiatives.

The margin in the last two quarters was lower due to a variety of factors, according to a top company official. Managing Director Sudipta Mukherjee explained, “The company is continuously improving its margin. We are aiming to increase the EBITDA margin level to 12-13% by the year-end. In FY’25, we achieved an EBITDA margin of 10.3%, up from 9.5% from the previous fiscal.”

Mukherjee further elaborated on the challenges faced in the last two quarters, stating, “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.”

To boost margins, the company is taking several strategic steps. One of these is 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,” Mukherjee said.

Additionally, Texmaco is 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 to be completed in the second quarter of 2025-26.

Despite the challenges, Texmaco reported a 13.5% year-on-year decline in consolidated net profit to Rs 39 crore in the March quarter. This was impacted by lower margins and supply constraints, although revenues increased by 17.6% to Rs 1,346 crore from Rs 1,145 crore in the previous year. 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 also signed two global partnerships to expand its international footprint and rolling stock manufacturing capabilities. One partnership is with European firm Nevomo for high-speed rail technology, and the other is with US-based Trinity Rail.

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% from Rs 113 crore in FY’24. Revenue rose 45.8% 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% growth over FY’24.

Mukherjee highlighted the significant opportunities presented by the Government of India’s long-term goal to increase the railway's share in national logistics from 27% to 45% by 2030. “Around 1.2 lakh wagons are expected to be delivered by 2025,” he said. “With an annual production capacity of 13,000 wagons, Texmaco is ready to capture its fair share of this demand.”