Texmaco Rail & Engineering Navigates Revenue Dip Amid Supply Shortage

Texmaco Rail & Engineering Ltd reported a 50.5% drop in net profit due to a shortfall in wagon wheelset supply. Revenue from operations decreased by 16.3%, and EBITDA margins contracted. The falling revenues were attributed to supply issues with Indian Railways, which have now stabilized.

Texmaco Rail & Engineering Ltd faced a significant 50.5% decline in net profit for the June quarter, primarily due to a severe shortage in wagon wheelsets supplied by the Railways. This scarcity had a ripple effect, leading to operational revenue plummeting by 16.3% to Rs 911 crore compared to Rs 1,088 crore in the previous year, squeezing profit margins.

EBITDA experienced a substantial drop of 36% to Rs 79 crore from Rs 123 crore, while the EBITDA margin narrowed by 267 basis points to 8.7%. Concurrently, earnings per share halved to Rs 0.75 from Rs 1.50 recorded in the same period last year. Furthermore, the PAT margin shrank to 3.2% from the previous year's 5.4%.

According to Executive Director and Vice-Chairman Indrajit Mookerjee, the decline was tied to a short supply of vital wagon wheelsets by Indian Railways, a challenge experienced industry-wide. However, he noted that the supply situation has since improved, stabilizing the company's revenue stream. Texmaco West Rail also experienced a temporary slump in revenue due to inspection holds by RDSO, which the company aims to rectify.

(With inputs from agencies.)