So any thoughts on Indian railway wagon tendering in FY '26? And how soon can we see any tender from the Indian Railway?
So we believe that the government has already restated their ambition and the target of staying with the 3 billion tons by 2030. And they are not deterring from that target which they have set for themselves. And in order to achieve that target, we do believe that the railways will have to come up with additional tenders. The current tenders that they have placed -- the orders that they have placed will get executed with -- by -- in this financial -- in the coming financial FY '26. Plus the railways do have the provision of adding 30% to the quantity. So we believe that somewhere in FY '26, maybe in the Q3, Q4, of FY '26, the railways should come up with the bigger tender.
And sir, here, in terms of opportunities, is it likely to play out in a year of 1 or 2 years? Or one should look like it's a long gestation and it could take like maybe beyond 2 years?
So in terms of -- I would say that the way these 2 new businesses, which is both SMS and SSS, safety and signaling systems and shipbuilding and maritime systems should be seen is that in the next 1 year, there are 2 KPIs. One is the associations or the strategic alliances that are formed for this business. And the second is the number of tenders that we can participate and the number of orders that we can get. I do not expect much of revenue to come in, in the coming year on FY '26 from these 2, apart from the old orders in the shipbuilding and maritime system that is continuing. But the 2 KPIs this year would be, as I said, strategic alliances that are formed and tenders participated stroke orders. The revenue of these 2 businesses will really start coming in, and the same will continue for FY '27 to a great extent, I would say. The first half of '27 should also be the KPI we should be. And then second half of FY '27 and FY '28 would be where the revenues will start getting reflected in our budget.
I just wanted to know, are you still facing wheel set supply issues? And just wanted to know current run rate and the run rate that we expect going forward.
So yes, the wheel set supply issues are continuing even now. There is still the normalcy of production in railway factories has not yet been resumed. We are expecting that to the end of this month or next month, things should get better. In terms of the current run rate, I can only tell you about what we have done in the last quarter. But definitely, the problem for the wheel set are not yet fully resolved. It is continuing in this quarter as well.
Sir, my first question regarding one of our JV partner, Amber technologies, like it mentioned, like in Vande Bharat, earlier they covered up to 16 coaches per train. But right now, it's being changed to 24 coaches per train. Is there any impact in our order book?
So as I just mentioned in my opening comments that the railways had told in May 2024 that they would like to modify the contract from a 16-car configuration to a 24-car configuration. And we had represented to the railways that while we are acceptable to be able to do that, this has to be done in terms of the relevant provisions of the contract and that discussion was ongoing. Now the Railways has finally issued the letter accepting our point of view wherein they have accepted to take the first few trains on the 16 car configuration itself. And thereafter, when they want to increase to the 24 car configuration, it would be done by way of exercise of the option quantity, which would not reduce our quantity, but in fact, enhance the quantity whenever they decide to exercise the option. As of today, there is no plus or minus commercial impact to the contract that we have.
Sir, is there any delay or the designing and execution side because of these changes?
No. The delay has been there because of the period of uncertainty. And as I had mentioned, the railways themselves have acknowledged that this period of uncertainty had nothing to do with the technology provider that is ourselves. And they have suitably readjusted delivery period for the same. We now expect the first train of Vande Bharat to be rolled out from our factory by March 2026 based on the agreement signed between us and the railways, a few days ago.
Sir, my last question regarding the wheel sets, like you have mentioned the production has been impacted on non-availability of the wheel sets. However, our competitor like reported like a positive territory numbers. Like is that because of the execution issues because of government and private order mix like -- and like when the execution will ramp up, sir? Because we're almost like achieve 800, 900 wagons per month. We have the capacity of 1,000 wagons. Is there any possibility to increase further maybe next 3 years' timeframe?
So as I have already said that we are targeting to be at 1,000 wagons per month or 3,000 wagons per quarter. And we are already having the capacity to do that to produce at the rate of 1,000 wagons per month or 3,000 wagons per quarter. In terms of what the competitor has done or not done, I will not be able to comment. I would only say that even in Q3, as per the records, which are publicly available from the Ministry of Railway, both private and railway combined. We, Titagarh is the largest producer of wagons, subject to correction, but the railway -- because the figures published by the Railway Board or the Railway Ministry say that we have produced 2,218 wagons in this quarter, whereas the other manufacturers production is shown as lesser than that.
A couple of questions from my side. First would be great if you could give us some update on the project progress for the Ahmedabad and Surat Metro project.
Sure, Parvez. The Ahmedabad project will be executed prior to the Surat metro project. Final stages of the designing are getting completed. We will delivered the first train of Ahmedabad in Q1 of FY '26, which is April to June quarter. And we are well on track to be able to do that. Thereafter, the production of the Ahmedabad will be done at the rate of starting with 1 train per month, ramped up to 2 trains per month, followed by continuous execution of Surat. That is how the contract is envisaged that we will execute first the Ahmedabad and then follow on.
Second, you mentioned that railways have extended the delivery time line for Vande Bharat, considering the time which has gone away. So now what is the revised delivery time line for Vande Bharat, and when will it start?
The delivery of the first train, which was scheduled in June 2025 will be now March 2026. So it's additional of 9 months. And then the balance trains will follow accordingly in the same manner that it will be.
Lastly, how has private sector wagon ordering -- we know you recently received the wagon order from cement. So how was the overall ordering in Q3? And what is the outlook going ahead?
I would say that the general capex cycle was a little subdued in the last few months, but it has again started coming up. We have seen new inquiries come in. And this has not been particular to our sector, but in general, I would say, over the last few months. But now things are picking up again and our testament to that is the recent order that we've done on the Adani Group. There are many other negotiations that are ongoing with different companies.
Sir, in the joint ventures, like what is the plant set up progress in the wheel-set business and investments done until now?
Yes. So the wheel set plant is coming up very well on track. We are moving as per schedule. The contract stated that the deliveries of the first wheels had to be made by, if my memory serves me correct, April 2026 and the project is very well on track.
Can you please provide ramp-up of metro coaches and expectation in ramp-up of metro coaches in FY '26 and FY '27, like per car per month?
So in FY '26, we will be able to ramp up our production to close to 20 cars per month by Q4 of -- I would say, end of Q3, Q4, we will definitely be able to ramp up our coach production to 20 cars per month. As far as the FY '27 is concerned, it will also depend upon the new order inflow because we have now started participating in focusing on the building up the other pipelines. So the capacity that we have created is to go to a 36 cars per month on metro. But we believe that the sweet spot for us would be about 25 cars per month, and we should be able to achieve that in FY '27, once we are able to get additional orders, which we are hopeful to get. Of course, Vande Bharat production, which is a separate line will also start in this.
My question is related to the new business verticals, particularly on the signaling and safety. Would it be possible to elaborate this opportunity in terms of how are you going to target it in terms of product development, technology absorptions or the technology development part of it?
Sure. So the safety and signaling is a very wide spectrum business. We have identified for ourselves 3 subsegments. One is rail mounted vehicles for different kind of safety and track maintenance, it is also relating to safety. One is onboard kind of systems. And the third is more electronic-oriented system. So we are -- we already have an association with one of the largest players in this field for a few products, which is Mermec of Italy. But we have also now initiated dialogue which are in different stages of finalization with different technology partners. Some may be by just way of TOTs, some maybe consortium bidding and some might culminate into joint ventures. We are also steadily working on designing or setting up our own development centers. Our engineering centers for the passenger system, now we have ramped up to more than about 120 people between Bangalore, Hyderabad and Calcutta, where we have more than 100 -- which approximately 120 people already, which will further be ramped up to 150 people.
So a couple of questions from my side. Number one, can you elaborate more on the maritime and the shipbuilding segment, like what kind of products are we targeting over there? And sir, second, our EBITDA margin for the quarter was around 10%. For 9 months, it is around, I think, 11%, 11.4%. So are we still confident on achieving around 13% to 15% going ahead?
So as far as the first one is concerned, on the shipbuilding and maritime systems. The products are the same that we have been doing. Specialized vessels for both navy, coastguard, but also for civilian users. We have seen also in the last budget that the sector found a lot of mention by the finance minister in budget speech. We have been in dialogue with the government and government has decided to take this as one of the key thrust structure because the percentage of shipbuilding and maritime systems that Indian producers have in terms of the global production market is very, very small, and the government is very keen to make this as a thrust sector. In terms of the EBITDA margin, we have always maintained that in the Freight business, the EBITDA margins are likely to be between 11%, 12%, and the operating leverages, of course, will help us to improve further. In the current quarter, it has been down by a few percent -- a few decimals of a percentage because of the operating leverage disadvantage. In terms of the passenger coaches, again, we have always said that it will be 10% or thereabouts till we start doing our own propulsion. And once we are able to integrate the complete number of trains that we produce with our own propulsion, that will be able to increase our EBITDA margins by another 4 to 5 basis points. So that is likely to happen in I would say in FY '27 to a greater extent. But FY '28, I would say would be the year where we'll be able to completely integrate our propulsion in-house.
Sir, I have just one question. On Vande Bharat, you mentioned that our first coach will go in March '26. So what is the schedule of deliveries post that?
So the schedule that was there originally will remain as it is in the sense that we will shift the first train from June of 2025 to March '26. Thereafter, the second train was supposed to be delivered after 60 days of the first train. And then the first year, there were supposed to be 8 trains, the second year, 12 trains and so on and so forth. So the starting date only gets shifted from June '25 to March '26, and the balance trains will continue to be delivered on the same basis with this readjusted starting date.
Just wanted to understand what kind of -- on the private wagon side, private wagon side, what kind of margin we should build in long term, including the backward integration efforts you are making on this?
So the blended margin of the freight business, as I've always said, is around 11%, 12%. The volumes of operating leverage or volume advantage will increase the margins by maybe 0.5 percentage point, maximum 1 percentage point. But in terms of private sector, if you really... So in terms of the private sector demand, the demand is only 10% to 15% of the overall demand for wagons. Of course, the percentages of EBITDA margin is maybe 2%, 3% higher in that. But then there is a higher risk that we carry. Private sector, as I said in the past, private sector places normally fixed price contracts, whereas the railways place contract with price variation clause. So if the prices do not -- input prices do not scale up, then the margins that one ends up making in the private sector is about 2%, 3% more. But in case the prices of commodities like steel, etcetera, rise during the intervening period, then that margin actually goes down. So for the sake of modeling, I would say it is much better to consider a blended EBITDA margin in this business of about 12%.
Sir, just on the metro side, if you can help us understand tenders which are quoted -- which are tenders could kind of open up in the next maybe 6 months or so?
Sure. In terms of the tenders that we have participated, which are all in public domain, we have participated in Mumbai and Bhubaneswar. And new tenders that are expected are a number of them. There is tenders expected from -- another tender expected from Chennai. There's another expected from Bangalore, from Nagpur, from Pune, from Patna, from Delhi. So there is a number of tenders that are in the pipeline. If one goes to the Ministry of Housing and Urban Affairs website to see the ongoing projects, wherever infrastructure for metro is being created, they will obviously require the rolling stock. So all of them are opportunities that we are looking forward.