Titagarh Rail Systems Limited (TITAGARH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Titagarh Wagons, TWL, Q4 FY 2020 Earnings Conference Call, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rushad Kapadia of ICICI Securities. Thank you, and over to you, sir.

Thank you. Good evening, everybody, and welcome to the Titagarh Wagons Limited Q4 FY '20 Results Conference Call. We have with us from the management Mr. Umesh Chowdhary, Vice Chairman and Managing Director; Mr. Anil Agarwal, Director of Finance; and Mr. Saurav Singhania, Group Financial Controller. I would now like to hand over the floor to these gentlemen. Thank you, and over to you, sir.

Thank you very much. Very good afternoon, everybody. My name is Umesh Chowdhary, and I'm joined by my colleagues. It's a pleasure once again to be on the post results conference call. Firstly, we apologize for the delay in the result -- in publishing the result, which was primarily on account of, of course, first, COVID and then pending the order for merger of the subsidiary companies of Titagarh Wagons into -- in itself, which was finally made effective only on the 2nd of October. And therefore, we held the Board meeting and announced the results yesterday. We would also be announcing the results for the June quarter on 14th of this month, that is next week. As you would have already got the investor presentation, which has been uploaded on the BSE website, the performance of the Indian operations -- and now I'm talking about the consolidated, that is the merged operations of Cimmco and Titagarh, has been significantly better than last year. This is in spite of the last week of March not being available to us on account of the COVID lockdown. Having said that, the focus last year had been, as I had mentioned during our previous investor call, that one of the focus of the company is to improve the balance sheet quality in terms of improving the working capital cycles, reducing the debt, improving the efficiency. And we have been able to achieve some of the targets that we had set for ourselves, I would say, quite satisfactorily, which is visible in the numbers that we have shared with you. So on a stand-alone basis, again, on -- I would say, the Indian operation basis, the order booking -- also we received an order a few days ago, about a couple of weeks ago from the Indian Railways for about 1,800 wagons valued at INR 600 crores (sic) [ INR 500 crores ]. But owing to the COVID crisis, the private wagon demand has seen a little bit of a slowdown over the last several months. We do believe that once the situation becomes normal, and we have seen some of the inquiries coming back in the market. So we anticipate that the private wagon demand will come back. As of now, the company is sitting on a fairly healthy order book, which has also been disclosed in the investor presentation. So we don't see any immediate risk to the company's performance on account of lack of orders. But of course, the future would greatly depend upon how quickly the economy can revive and the economic activity can pick up again. As far as the overseas subsidiary, which is primarily the Italian subsidiary now with the business transfer and closure of the French one, the impact of the COVID crisis has been far more significant in Italy than in India because the crisis began there or started showing or creating disturbances somewhere in January. As a result of that, while in the first 9 months of the financial year we were able to register a positive EBITDA, the last 3 months the situation completely changed and we had to close the year with a negative EBITDA on a cumulative basis. The operations of the Italian company have restarted from around June or July, and slowly they are getting stabilized. Now they are more or less stabilized and, of course, we keep our fingers crossed that we should not have what they generally refer as the second wave. Again, due to the new management, the new strategies, we have been able to optimize the Italian operations quite substantially. The challenges that still remain are, of course, the normal challenges apart from COVID: availability of working capital and the supply chain becoming normalized and so on. But we are quite hopeful on the Italian subsidiary being able to deliver a much better set of numbers in this current year. We are also quite hopeful that barring extraordinary circumstances, this year, we should be having a much better, positive EBITDA in Italy. And the Italian debt levels continue to be around the same level that was before. Again, it has been disclosed in the investor presentation. So coming back to the consolidated numbers. We have in our balance sheet -- while we have registered operating profits, there are certain extraordinary one-off, onetime items. One, of course, is relating to the French company, which is a discontinued operation. So all the potential liabilities that were there relating to the French discontinued operations have been either paid or provided. And considering the losses that were already incurred in Italy from the time we acquired the company up to date and considering the valuation done by an independent valuer, we have taken a noncash hit on our P&L this year in the Indian books for the investments that were made for the Italian subsidiary, as a result of which, there is a hit of about EUR 12 million as impairment of investment value. So that is, in some exceptions, the situation of the company. Just a very quick update on the contracts that we are executing. The Pune Metro contract that is a very prestigious contract, that we had booked, is going on track. We launched the styling of that. It was launched by the Secretary, Ministry of Housing and Urban Affairs on the 15th of August this year, which has been very well appreciated. The production of that has already begun in Italy, and the plant setup is going on as per schedule in India. For the propulsion, we have started executing the developmental order. We signed a strategic partnership with ABB for the EMU and MEMU propulsion. So that is also going on track. We expect that in the next financial year -- beginning of the next financial year, we will be able to deliver the first batch of both the Pune Metro and the propulsion order. As far as the shipbuilding segment is concerned, we completed all our previous orders. We have participated in several tenders for Navy and certain other customers. I would just like to remind that our focus on the shipbuilding segment is to cater only in the specialized vessel segment. We are not getting into the general cargo vessel segment. So we have participated in tenders in the Navy, and we are hopeful to be able to bag some orders soon enough. On the bridge, we acquired the 50% stake that was held in the joint venture between Matiere and Titagarh called the Matiere Titagarh Bridges. MTB now is a 100% subsidiary and the -- we have bagged orders for about INR 50 crores, INR 60 crores in that right now. And going forward, we will be developing that business. We believe that modular steel bridges in India does have a very good market. And with the clarity in terms of management and ownership with the MTB, who continue to be a technology partner for us, and we are under license with them. So we believe that, that is another segment that should start contributing to our top and bottom line. So thank you very much. With these few words, I'm most happy to take any questions.

[Operator Instructions] The first question is from the line of Saurabh Jain from Sushil Finance.

Sir, I have few questions. Shall I ask one by one? Or shall I just put up all my questions altogether?

I guess you can put up your questions together, and we'll try our best to answer them together.

Okay. Sir, my first question is, if you could throw some more light on our tie up with ABB for propulsion systems for Indian Railways? I mean what's the size of the opportunity? And what would be the margins approximately? And what would be our share of the business? Also, what is the opportunity for TWL as a subsupplier for ABB, ATRs and GESA as mentioned in the presentation? That was my first question. Second is on the order book. We have now consolidated order book of around INR 5,300 crores. So this is executable over what period of time? And when is the major portion of this likely to be recognized in revenues? What would be the average blended margin on this order book of INR 5,300 crores approximately? If you could provide some range or something. And what is the CapEx plan for next 2 years now? Do we need to invest in capacities for execution of these orders on hand? Also, since we are on the debt reduction regime, can we expect a current debt of around INR 750-odd crores as the peak for the next 2 years? And on the Italy front, with TFA holding orders worth almost INR 2,800 crores and we have seen in last 2 years, the run rate has been like INR 500 crores for FY '19 and INR 300 crores for FY '20, so where do we see top line reaching in FY '21, '22? '21 would be majorly hit by COVID. And lastly, on the specialized equipment and bridges and shipbuilding. Although you have mentioned in your opening remarks that we have got some orders for bridges, some INR 50 crores, INR 60 crores, but it's been quite a long we haven't got any major break-throughs in shipbuilding also. So what sir, -- if you could throw some more color on the prospects of these 2 segments? And sir, lastly, overall, looking at the current order book inquiry base and all the upcoming opportunities in metro segment or other areas of interest, so -- and clubbing it with our experience, what are we targeting in terms of our top line and EBITDA margins over the next 2 to 3 years? That's all from my side, sir.

Thank you very much. That was a very comprehensive set of questions. I'll try my best to answer while being conscious of the fact that we cannot give you forward-looking numbers. So whichever questions of yours are in relation or are resulting in forward-looking numbers, I would apologize that I'd not be able to answer them. I'll come to the questions one by one. The ABB tie-up is a strategic tie-up wherein we have partnered with ABB for development, design and development of the EMU and MEMU traction converter for the propulsion, which is bought by the Indian Railways. Incidentally, our company also has been a manufacturer -- or is a manufacturer of EMU and MEMU. But the railways primarily buy these from their own production units, that is ICF, RCF and MCF. The overall business of this is quite high. The companies that are now supplying to the ICF, MCF and RCF are companies like Bombardier, BHEL, Medha, et cetera. We believe that this can be a segment that can give us, at the peak, revenue of a decent size, maybe INR 300 crores to INR 400 crores, this product alone. And the tie-up with ABB is that -- it is -- we are jointly developing the design and getting it approved, and then they will be supplying us some part of the converter. And the final converters are going to be manufactured by us in our plant in Calcutta. As regards the tie-up with Ansaldo Breda is concerned, it is not a subsupplier agreement. It is a technology agreement. The -- some of you might have already read about the Metrolite, which has been announced by the Government of India, which is essentially light LRV systems or tramway systems. Ansaldo Breda has a proven design for those, and we have taken a sublicense with the right to buy those license over a period of time. That gives us a head start and a reduced cost of entry into the LRV segment. This is essentially an extension of our strategy of being in the metro segment -- metro coach segment. As regard to the CapEx plan, as of now, apart from the design development CapEx, more or less, the residual CapEx, we have already in the last few years continued to upgrade our plant. We are now spending money in upgrading our Uttarpara plant to make it a center of excellence for metro coach and propulsion production. The strategy is not to have a very large amount of CapEx because we already have -- I would say, the glass 80% full. So whatever is required is going to be residual CapEx. We do not envisage that we will need to draw external financing for that, and we should be able to meet that with our own internal accruals. So therefore, there should be no massive fundraising required for the already existing CapEx plans for the existing lines of business. As regards the debt reduction is concerned, I would request the debt to be bifurcated between the 2 jurisdictions, which is India and Europe. Maybe I will just request the CFO to answer.

Yes. So basically, the entire debt of the -- the consolidated debt has to be coming from the 2 sides: one is the India debt, and second is the debt relating to TFA. As far as India debt is concerned, if you might have noticed, we have been able to reduce our debt quite substantially. And as we have already informed in the previous investor call, idea would be to make India as a debt-free company, maybe by way of -- by end of March '21. And I am saying from the point of net debt, we would like India to be net debt free. As far as the debt relating to TFA is concerned, it will continue. And based on the business plan, which we have thought for TFA, we hope that we would be needing some more funds at the TFA level to support the working capital requirement. In terms of another question, particularly the specialized equipment and shipbuilding, basically, if you see in the past, we have been able to book few orders and we -- which we have successfully delivered. Now we have participated in the various tenders relating to shipbuilding as well as some defense equipment and some bridge-related tenders, the result of which has not yet come. And we hope that very soon, the result would be out, and we would be able to get some contract for these 2 businesses. I believe we have been able to answer more or less all your questions.

Sir, order execution side, if you can just...

Yes. So if you have noticed that the order -- the current order book comprises of the different business segments, some partly from the wagon business and partly it's from the transit business. So generally, the order relating to the wagon business is executable over a period of 12 to 15 months. But in case of the orders for transit business, these are normally executable over 30 to 36 months.

Okay. And what would be the average blended margin overall for this order book of INR 5,300 crores?

Yes. So it would be more or less in line with what we have been historically achieving. It's not that something will undergo a substantial change.

Okay. So 8%, 9% kind of EBITDA margin that...

I will not comment on that, yes. But as I said, historically, whatever we have been able to achieve, we would be trying to maintain that.

Okay, sir. And lastly, on the TFA run rate or revenue run rate, if you can just...

So TFA, as far as the Titagarh Firema run rate is concerned, if you see in 2017, we did a revenue of about EUR 110 million, EUR 115 million. After that, we got caught up with the legacy contracts that we had taken up for execution. So we should be able to get back to that run rate pretty soon. I mean this year, of course, is a little bit of an aberration. But clearly, we will be able to register a much significant growth over the last year, that is FY '20. And I think by '22, we should be able to get to the run rate of EUR 100 million, EUR 150 million a year.

[Operator Instructions] The next question is from the line of Sreeram Ramdas from Green Portfolio, SEBI-registered PMS.

In relation to our Italian subsidiary, can you please tell us how many coaches, maybe metro or high-speed units, have been delivered since the acquisition? And how many have been delivered in the past year?

Yes, sir. So since our acquisition, in terms of the new coaches delivered, I think -- I mean, I don't have the exact number offhand, but I'm giving the order of magnitude, we have delivered about 150 EMU trains or EMU coaches to different customers since 2015 that we had acquired. This includes double-deck EMU coaches and single-deck 160 kilometers per hour EMU coaches. In terms of the number of coaches developed -- delivered last year, last year, primarily, we were, as I said, executing legacy contract, which was for revamping old coaches. So very few new coaches were delivered. It was primarily contracts to revamp the old coaches that was executed last year.

That answer was pretty explicit. And secondly, for a clear picture, can you just tell me more about the alliance with Hitachi? This was mentioned in the presentation, hence, why I'm asking.

Beg your pardon, if you could just repeat your question? That was not clear.

Sorry. Just for clarity, can you please tell us more about the alliance with Hitachi, the strategic alliance with Hitachi, which was mentioned in the presentation?

Yes. So what we are doing with Hitachi in Italy is that we have certain tie-ups with them for participating in tenders. We just won a tender in a consortium with Hitachi. And apart from that, because we have a huge workload and we have a very large facility, which is able to absorb additional workload, we are taking certain percentage -- or we are dedicating certain percentage of our capacity as outsourced contract manufacturing. This is in order to provide stability of workload in our facility.

The next question is from the line of Deepak Poddar from Sapphire Capital.

Sir, I just wanted to understand in terms of your operation by when do you see your operation getting completely normalized in India as well as in the overseas operations?

Are you referring to the COVID situation?

Yes, yes, yes.

So by and large, the operations have gotten regularized in both India and in Italy. Unless there is, knock on wood, any further kind disturbance, I would say that by and large, we have been able to normalize the operations in both the jurisdictions.

Understood. And so has there been any action taken in terms of cost rationalization? So if your revenue comes back, will that benefit your margins in any way, sir? So any comments on that would be helpful.

That is an ongoing exercise, and we have continuously focused on rationalizing costs in India and in Italy. For example, in Italy, we had 3 plants, which we have consolidated: one, we have already moved to the main plant in Caserta; the second, we have already announced. And by beginning of next year, we will move the production of that also to a single plant. So all activities like that are going to consolidate costs. So that, COVID or no COVID, that is definitely one of the pillars of our strategy, both for India and Italy in terms of efficiency improvement and cost rationalization.

Is it possible for you to quantify? Or what sort of cost benefit are we looking at?

It would be -- it would not be possible for me to give an exact number to that because, as I said, it's an ongoing exercise. We believe that this is something which is to be done on an ongoing exercise. It's not a restructuring that we are doing. It's an ongoing cost optimization exercise that we are doing. In a restructuring, it would have been possible to quantify the number. But in an ongoing exercise, this becomes difficult to give a number.

The next question is from the line of Shyam Sundar Sriram from Sundaram Mutual Fund.

Sir, one question I wanted to ask you on the orders closed. You did talk about new order -- wagon orders won from Indian Railways worth of INR 500 crores in September '20. Sir, generally, I wanted to understand, in terms of the order flow of -- for wagons this year for some maybe May onwards, how has been the order flow momentum been? So if we compare with last year, how do you see -- I mean, we leave aside the period for which we were shut, say, April and May, which I'm sure practically nothing would have happened. But after that, how has the order flow momentum been in wagons, say, at the overall level in terms of the order flow momentum? If you can please comment on that.

Sure, sir. As far as I've mentioned in my opening comments, the private sector wagon demand is concerned. It has been rather slow because people have been waiting and watching the situation unfold. So we -- I would say that it has been much slower than what we would have liked it to be as far as the private sector wagon demand is concerned. As far as the railways is concerned, we were able to get an order for about 1,800 wagons against the last year's tender, which got finalized somewhere last month. But we have, over the last maybe few weeks, seen a good momentum in terms of inquiries. They have not yet converted into orders, but there is a momentum that is building up in terms of the inquiries. So we do believe that once economic activity settles down, there would be a good flow that should restart.

Okay. Okay. So for the full year, from an overall order flow perspective, in FY '21, that would still be around maybe 50% lower than what it was last year in FY '20, sir? And then recovery -- incrementally, while the economy recovers, maybe FY '22 can revert to the -- to a normal level of order flow?

It would be very speculative on my part to comment upon that, sir, because we do not know how the economic revival is going to take place. All I can say is that the product of the company is such that it is directly related to the economic activity in the country. So if the economic activity picks up faster, the demand for wagon has to pick up faster. So when these orders are going to get finalized is something that -- it would be speculative for me to comment at this point.

Sure, sir. So this 1,800 wagon order that we have won, that is the first order from Indian Railways, is it? Or there -- are there...

Yes. This is the last year's tender, which was finalized recently. It got delayed due to the COVID and so on. It has recently -- just about a few weeks ago, it's been finalized.

The next question is from the line of Parvez Akhtar from Edelweiss Securities.

Sir, a couple of questions from my side. One, so obviously, this year has been volatile largely because of COVID and the disruption to the economy that the pandemic has caused. But going ahead -- and obviously, execution on some of the major projects, even the government has suffered. But in our assessment, when could we see the wagon ordering for the dedicated freight corridor starting?

So as far as the DFC is concerned, our understanding is that by 2022, the DFC should get operationalized fully. And we expect that the ordering for the wagons would start somewhere in calendar year 2021 middle. Beginning or middle of 2021, the ordering for the DFC wagons should pick up momentum.

Sir, just maybe if we can get a couple of data points. One, what would have been the wagon dispatched in the Indian entity in Q4?

Q4, we will come back to you with an exact number of Q4 number of wagons. But it would be about 1,000 wagons.

And sir, last question. In our wagon order book in India, what would be the share of private sector wagons as of now?

As of now, the private sector -- what -- in the order book you're saying, right?

Order book, yes.

So most of the private sector wagon orders have been executed. The share of the wagon orders from private sector in our order book outstanding is very low. It's negligible I would say, maybe a few percentage, single digit percent.

The next question is from the line of Amit Doshi from Care PMS.

This -- historically -- or I mean, of course, with this overseas acquisition that we have done for last 4 to 5 years, in our experience, so overseas margins have generally been low compared to the Indian margin -- Indian business margin. So you have mentioned in the presentation about improved margin kind of visibility sort of a thing. So what makes a differentiation? Or is it because of some new type of orders, new capability buildup that will allow us to generate a better margin or something else? So can you just throw something on that?

So is your question, sir, relating to the Indian EBITDA margins? Or is it relating to the overseas? Or it is relating to consolidated?

Overseas, more of overseas because that is generally drawing down our overall performance.

So overseas, when we acquired the company in 2015, overseas -- when we acquired the company in 2015, one of the criteria of acquisition was that we inherited the legacy contract, the old contract of about EUR 220 million, of course, one part of which we executed in the beginning of the acquisition, which was profitable. The balanced contracts that we had were contracts that were as old as 12, 15 years old, which had technological challenges, obsolesce challenges and, of course, price and cost challenges. The margins of those contracts were not positive. In some cases, they were quite onerous. Now we have come almost to a conclusion of those contracts. So as we speak, our total order book, including our new framework contracts that are outstanding, maybe just less than 10% of that is the old contract. So obviously, the newer contracts, we are able to bid with better margins than what we inherited. That's the reason why we get better visibility or more optimistic situation in terms of the margins. Having said that, yes, your observation that the margins generally in Europe are lesser than the margins in India. But that is purely the way the economic drivers work. So comparing the margins in India, where the cost of financing and so on is much higher, compared to the European jurisdiction would not give you an apple-to-apple comparison.

Okay. Okay. Thus you continue -- plan to continue the debt of the overseas business. So what would be the rough average borrowing cost there of that business -- overseas business?

I would say a ballpark of 3%.

3%, okay. This metro order that we have, is it counted under the Indian order book? Or it is counted under the overseas order book? Because I think designing, et cetera, is being -- or I think the first batch is going to be produced there, I think.

It's a consortium order. Bulk of it is considered under the Indian order book and about 20% of the order is executed by Italy, including the designing and the first 3 trains, which goes into the Italian order book.

Okay. Okay. Okay. Sir, you mentioned about -- one of the participants asked about the CapEx. You mentioned only the residual CapEx needs to be done for whatever that order book that we have on our hand as of now. So what could be that residual CapEx number? Any rough number is fine. I mean I'm not looking at an exact number.

Well, I would say, for all our different business segments combined, anything between INR 50 crores to INR 80 crores.

INR 50 crores to INR 80 crores. Okay. Sir, you'd mentioned DFC opportunity...

Over a period of time, this is not going to be incurred in 1 year. So this is going to be required over a period of time to develop the business.

Okay. So over 3 years, this executable order book periods. Okay. Okay. Okay. Sir, DFC opportunity, you mentioned it will start next year, probably mid next year. So what could be the size of that? Because DFCs, I believe, is quite a big kind of an operation. So what kind of order or what kind of size that we estimate out or DFC opportunity that we see?

So the DFC opportunity, there is no data to exactly quantify the size of the opportunity. The only thing which is clear that the opportunity can be very large because it is a transformational project. And if you really look at the CapEx that the Indian Railways or Indian government has put in creation of the dedicated freight corridor, the only way that this payback that they can utilize or they can get from this CapEx is utilization of that capacity by -- and for that, they will require additional wagons. So for us, the calculation of the business plan number in this was on that basis and not on the basis of the exact kind of any reports that have been officially or unofficially published by the railways.

Okay. Okay. No, so typically, like you have this L1, L2, L3, that ratio of 22% and 18%, et cetera. So any sort of -- your expectation of that DFC kind of orders?

Sorry, your voice was not clear. Could you repeat your question?

Okay. No, I think -- okay, fine, I broadly got the idea. The last question from my side. So we are having this lot of JVs, whether with Matiere, whether with ABB, whether with Hitachi. So what sort of role our -- is ours in all those JVs, an executor or something else?

So these are not all -- are not JVs. ABB is a strategic cooperation, and the role we have is different, wherein the role of ABB is the designer and supplier of component, and we are the final executor of the product. In the case of Matiere, it's again a technical license agreement, no longer a JV, wherein they provide us the design or a royalty and they supply some components. So every cooperation agreement has a different model altogether. And most of them are no longer JVs. They are cooperation agreements.

[Operator Instructions] The next question is from the line of Ankur Agrawal from Rc Wealth Solutions Private Limited.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Operator Instructions] The next question is from the line of [ Brijesh Singh ] from [ Go Grow Investment ].

I want to know that the government is going for the privatization of railways. So what will be effect to the Titagarh?

As far as the privatization of the railway is concerned, it is opening up 2 opportunities for Titagarh: One is an opportunity as a potential operator of these trains. We are not yet certain about whether we would like to be an operator. Of course, we have put in our EOIs, but we are evaluating whether it would make economic sense for somebody like us to get into the operations of trains. But the definite opportunity that we have for Titagarh is a larger market base. It is similar to wagon. Earlier, wagons was only purchased by the railways. Now with the private wagon operation scheme, there are many customers or potential customers for wagons. So the same is going to be the story for the private train operations.

[Operator Instructions] The next question is from the line of Sreeram Ramdas from Green Portfolio, SEBI-registered PMS.

This is in relation to the Italian unit's impairment. You said that there was an impairment of INR 69.4 crores. And I just wanted to know what the nature of this impairment is because I believe we have a strong order book consisting of Catania and the Pune Metro project. So what is the particular nature of this impairment?

Yes. So this impairment scheme has been done as per the requirement of the accounting standard that India's requirement and wherein the investment has to be -- the valuation of the -- value of the investment has to be done as per the accounting standard, keeping into account the past losses, the future potentials and everything by applying the proper discounting rate and all that. So based on the independent valuation carried out by an independent valuer, there was impairment of the value of the investment. And accordingly, the provision has been done in the books.

Okay. So this is -- this impairment is...

Just to add further, more or less, this is equivalent to the losses that company has already incurred in the past. So basically, while the impact was there on the stand-alone balance sheet, but on the consolidated balance sheet, basically, so these losses were already carried to the consolidated balance sheet. So there's no impact for this provision. And it's a noncash item.

[Operator Instructions] The next question is from the line of Parul Sethia from ICICI Bank.

So my small question is that what would be the market share as of now that Titagarh Wagons is having? The latest market share in the Indian Railways and the wagon manufacturing?

Yes. Thank you very much. As regard to the market share is concerned, Titagarh Wagons is definitely the market leader, both in terms of the assessed capacity given by the RDSO and the production actually done, also as well -- as far as the order is received. But we are in a tender-oriented business, wherein the exact market share keeps on fluctuating from tender to tender or from year to year. So therefore, to give an exact market share is going to be a bit of a misnomer. But suffice to say that we definitely, in terms of the RDSO capacity rating, particularly in the merged entity of Titagarh and Cimmco, and in terms of the execution over the last years, we are the market leaders.

[Operator Instructions] As there are -- we have one question from the line of [ Ankur ], an individual investor.

Sir, my question is on the 2 metro projects which were bid out, Agra and Kanpur. I think we did not participate in that. Can you please let us know the reason?

So there are a lot of future metro projects which are -- which we have targeted, and accordingly, we are working towards that. So all the new metro tenders we would be participating.

Okay. So for these 2, we were not ready for these 2, is it?

Yes. Agra, I believe it's not yet closed. So we would be targeting that. And basically, our goal is only towards the supply of rolling stock, not the entire metro bid -- metro project.

Okay. So in the next, let's say, a couple of years, we expect a lot of new metro tenders to be coming out?

Yes, it would be. We expect that a lot of new metro tenders would be coming out for supply of rolling stock. And we definitely are looking forward to participate in all those tenders.

As there are no further questions, I would now like to hand the conference over to the management for closing remarks.

So yes, thanks to everyone for participating in this call. And we hope that we have been able to provide the necessary clarification to all. The company is working very hard. And in spite of this COVID situation, we have been able to normalize the operation, both at India level and Italian level. And we hope that the effort of the company would start paying result and good numbers will be delivered in near future. Thanks, everyone.

Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.