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NIFTY ENERGY 31,198.50 up stock 349.45 (1.13%)
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NIFTY 50 22,932.90 Down stock -12.40 (-0.05%)
NIFTY 100 23,368.55 up stock 37.15 (0.16%)
NIFTY 500 20,731.45 up stock 120.05 (0.58%)
NIFTY MIDCAP 50 14,162.75 up stock 166.00 (1.19%)
INDIA VIX 15.42 Down stock -0.25 (-1.56%)
NIFTY MIDCAP 150 18,644.90 up stock 269.05 (1.46%)
NIFTY SMALLCAP 50 7,509.05 up stock 163.05 (2.22%)
NIFTY BANK 49,570.10 up stock 482.80 (0.98%)
NIFTY AUTO 21,809.15 Down stock -9.75 (-0.04%)
NIFTY FMCG 52,360.45 Down stock -120.05 (-0.23%)
NIFTY IT 40,924.25 Down stock -540.10 (-1.30%)
NIFTY MEDIA 1,493.70 up stock 21.05 (1.43%)
NIFTY METAL 8,359.20 up stock 103.60 (1.25%)
NIFTY PHARMA 20,820.00 Down stock -149.20 (-0.71%)
NIFTY PRIVATE BANK 24,778.10 up stock 277.50 (1.13%)
NIFTY REALTY 845.95 up stock 13.90 (1.67%)
NIFTY OIL & GAS 10,045.60 up stock 73.55 (0.74%)
NIFTY COMMODITIES 7,839.00 up stock 57.15 (0.73%)
NIFTY ENERGY 31,198.50 up stock 349.45 (1.13%)
LEADMINI 188 up stock 0.20 (0.11%)
ZINCMINI 261.25 up stock 0.25 (0.1%)
SILVERMIC 89730 up stock 72.00 (0.08%)
GOLDGUINEA 59188 up stock 50.00 (0.08%)
GOLDM 72900 up stock 28.00 (0.04%)
COTTONCNDY 56540 up stock 20.00 (0.04%)
SILVER 89675 up stock 29.00 (0.03%)
CRUDEOIL 6609 Down stock -237.00 (-3.46%)
NATURALGAS 177.5 Down stock -0.30 (-0.17%)
NATGASMINI 177.5 Down stock -0.30 (-0.17%)
MENTHAOIL 942.2 Down stock -1.20 (-0.13%)
ZINC 260.7 Down stock -0.25 (-0.1%)
ALUMINIUM 220.5 Down stock -0.20 (-0.09%)
LEAD 187 Down stock -0.10 (-0.05%)

Updated 15:10 IST, September 21st 2024

Wagon manufacturers project 20% revenue growth amid robust demand

Order books are about 2.3 times their revenue from the previous fiscal, and with wagon manufacturers likely to operate at around 90 percent capacity

Reported by: Business Desk
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Tower wagon
Tower wagon | Image: X- ANI

Wagon manufacturer: Wagon manufacturers are expected to rake in about 20 per cent revenue growth in the current fiscal, driven by a healthy order backlog, the release by Crisil Rating showed.  This will be for 65 per cent of the industry's wagon-making capacity—around 40,000 wagons annually— pointing towards better operational efficiencies raising operating margins by around 100 basis points, translating into stronger cash accrual.

Official actions engender railway efficiency in transport.

Rail transport share in logistics is to be increased from 27 per cent to 45 per cent by 2030. Because logistics costs constitute 14 per cent of India's GDP , far more than the 8-10 per cent in the US and parts of Europe. This is achieved by increasing wagon availability; over 90,000 wagons were ordered in the last two fiscal years-alone, much higher than the decade's average of 10,000 wagons annually.

Booming Demand for Wagons from the Private Sector

Private players in the steel, coal, and logistics sectors are also availing the Liberalised Wagons Investment Scheme. Most of these private orders attract a premium of 10-15 per cent due to limited competition, which also further improves the financial prospects of the wagon industry.

Improving Capacity Utilisation and Financial Parameters

Order books are about 2.3 times their revenue from the previous fiscal, and with wagon manufacturers likely to operate at around 90 percent capacity - up significantly from the less than 50 percent capacity utilization witnessed in fiscal 2021 - operating margins are expected to rise to about 12.5 percent, leading to strengthened accruals.

Watch for Policy Changes

In a positive trend, there is still a need for stakeholders to stay alert and ensure they monitor any changes that are likely to occur in government orders or policies, which will affect private ownership of wagons in future growth trends.

Published 15:10 IST, September 21st 2024