"Overall, the positives far outweigh the negatives. The company at its higher band is available at a price multiple of less than 20 times and market cap to sales of less than 4 times. A brief comparison with its listed peer suggests that the company is available at attractive valuations. Given that its future prospects appear encouraging, discerning investors could consider investment in the shares of TWL with a long-term view."
The full article can be accessed here.
The Union Railway Budget for 2008-09 had a host of announcements for the wagons manufacturing industry. Some of the excerpts from the Railway Minister's Budget speech are as follows:
- Modernization of Rolling Stock
While in 2003-04, 6,300 wagons were manufactured whereas in 2007-08, 15,000 wagons are expected to be manufactured. In 2008-09, manufacture of 20,000 wagons is planned which would be the highest level of wagon productions so far. Similarly, in 2008-09, 250 diesel and 220 electric locomotives will be manufactured which would be a record in itself. Production of new generation diesel and electric locomotives will also be stepped up substantially.
- Manufacture of new design wagons by wagon manufacturers
Till now, wagon manufacturers have been manufacturing wagons in accordance with standard designs prescribed by RDSO. As a result most of the wagons in use on Railways are of the design of 70s and 80s. We have formulated a new policy to promote induction of wagons with modern and new designs in the Railways. This policy makes adequate provision for simplifying the process of certifying and accepting the new wagon designs and protecting the intellectual property rights of the companies. Wagon manufacturers will now also be able to import technology from abroad to bring modern designs into the Indian Railways. This policy will facilitate continuous upgradation in the wagon technology.
- New Wagon Leasing Policy
In order to develop the wagon leasing market, we have prepared a new wagon leasing policy under which, rail customers and container operators will be able to take wagons on lease. For getting registered under the scheme, wagon leasing companies should have a minimum net worth of Rs. 250 cr and will have to deposit Rs. 5 cr as registration fee. Registration will be valid for 20 years and will be renewable for another 10 years on rendering satisfactory services. Leasing companies have been given full rights to choose or change their lessees. These companies will lease out special purpose wagons, high capacity wagons and container wagons.
- New Wagon Investment Scheme
The Wagon Investment Scheme announced in the year 2005-06 has been extremely popular amongs iron-ore customers. During the last three years, approval has been accorded for an investment of over Rs. 1,500 cr for procurement of 138 rakes. Against this, 42 rakes have been received so far at a cost of around Rs. 500 cr.The old Wagon Investment Scheme has not been popular with other than iron-ore customers. Therefore a new liberalized Wagon Investment Scheme has been prepared. Under this scheme, investments can be made for procurement or leasing of special purpose and high capacity wagons. Freight discounts at prescribed rates will be granted for investment in special purpose wagons and high capacity wagons.
- Container Business-Mission 100 MT
In the last three years, 15 operators have been given licenses for running container trains. Presently, 146 trains of Container Corporation and 44 container trains of other container operators are running. The number of trains run by other operators is expected to increase to 50-55 by the end of this year. The total container traffic is expected to be 26 million tonnes in 2007-08 including 2 million tonnes contributed by new operators. Presently 60 container depots are operational including three constructed by private parties. It is expected that eight container depots by Container Corporation and 40 by other operators would be developed in the coming years.Each of the aforesaid announcements are expected to boost demand for wagons substantially over the next few years.