We expect a respectable share of wagons' order this year: JP Choudhary, CMD, Titagarh Wagons
JP Choudhary, CMD, Titagarh Wagons, says that the company expects to receive a respectable share of the 18,000 wagons' order the Indian Railways is expected to give this year.
By 
|
| In a chat with ET Now, JP Choudhary, CMD, Titagarh Wagons, says that the company expects to receive a respectable share of the 18,000 wagons' order the Indian Railways is expected to give this year.
The government is expected to give orders for 10,000 wagons in the next two or three months versus 12,000 wagons last year. How much of this do you expect to pocket?
The orders should be placed sooner than 2-3 months. It should come in the next one week or 10 days. The file is in the final stages and the order will be for around 18,000 wagons and we will have a respectable share. It is too early to speculate on that but it should be quite respectable and we hope that the year should be good.
When you take these contracts, is there an inbuilt clause for an increase in price of steel or whatever else you use or are the prices fixed? Do you give a fixed tender and if the prices fluctuate, do you get the benefit or lose out?
No. All the railway major contracts are with an escalation clause.
What about a de-escalation clause, which means if iron prices were to fall by 50%, do they give the benefit to the railways?
Yes. It works both ways.
What kind of margin can you get given the fact that obviously you tender, PSUs tender and everybody tenders?
The margin again varies on the type of wagon, the complexity involved and the technology involved but so far our margins have been around 10-12%.
By what capacity are you utilising your space right now and from the stage of actually giving the order to you start manufacturing, how far away could it be for this new set of orders?
As far as the present is concerned, we are not able to utilise the capacity fully for want of adequate orders and the new tender has taken a little longer than what we anticipated. But once we have the orders, we will be fairly ahead in terms of capacity utilisation. Normally, a lead period of 2-3 months is needed after you receive new orders, but then sometimes by taking certain proactive supply chain management actions, you are able to reduce that cycle from 2-3 months to even earlier.
The government is expected to give orders for 10,000 wagons in the next two or three months versus 12,000 wagons last year. How much of this do you expect to pocket?
The orders should be placed sooner than 2-3 months. It should come in the next one week or 10 days. The file is in the final stages and the order will be for around 18,000 wagons and we will have a respectable share. It is too early to speculate on that but it should be quite respectable and we hope that the year should be good.
When you take these contracts, is there an inbuilt clause for an increase in price of steel or whatever else you use or are the prices fixed? Do you give a fixed tender and if the prices fluctuate, do you get the benefit or lose out?
No. All the railway major contracts are with an escalation clause.
What about a de-escalation clause, which means if iron prices were to fall by 50%, do they give the benefit to the railways?
ADVERTISEMENT
Yes. It works both ways.
What kind of margin can you get given the fact that obviously you tender, PSUs tender and everybody tenders?
The margin again varies on the type of wagon, the complexity involved and the technology involved but so far our margins have been around 10-12%.
By what capacity are you utilising your space right now and from the stage of actually giving the order to you start manufacturing, how far away could it be for this new set of orders?
ADVERTISEMENT
As far as the present is concerned, we are not able to utilise the capacity fully for want of adequate orders and the new tender has taken a little longer than what we anticipated. But once we have the orders, we will be fairly ahead in terms of capacity utilisation. Normally, a lead period of 2-3 months is needed after you receive new orders, but then sometimes by taking certain proactive supply chain management actions, you are able to reduce that cycle from 2-3 months to even earlier.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
ADVERTISEMENT
