Transrail MD Explains Q4 Slowdown Amid Global Disruptions

Added: 2026-05-31

[00:00:00]Joining us we have Mr. Randep Narang MDNCU at Trans Lightning joining us in the studio. Mr. Narang welcome to the show and it's always a pleasure to speak to you. This is Halier. My question to you is uh FI26 overall seeming very good right the pressure point has been the fourth quarter of FI26.

[00:00:20]Uh what has gone wrong there? What have the factors that have impacted there?

[00:00:24]and two if you have to look at it getting into FI27 how much of it has been a carry forward as well in terms of the pain points >> uh so thank you for having me over both of you uh if you recall the Q3 guidance we had given from a 25% growth over previous year we had made it 27% >> and actually we've done 30 which basically means that we bettered our Q4 in terms of revenue numbers so actually What happened was that around 20 projects transmission substation we've completed by December. So we knew that there will be a startup design engineering approval process in Q3.

[00:01:08]>> So that has slowed us down. There's a difference of only 80 odd crores versus uh what we did last quarter last year in Q4. And second was the disruption in the marketplace globally. as you know supply chain got affected supplies LPG labors our supply chain backward supply chain got uh disturbed so all that you know culminated into this but my guidance was 30%. So Randep G just a question just a follow up had asked this does this pressure go more because March there was a little bit of impact now but April May we have seen a larger impact coming in >> so will we see that pressure in the first quarter >> so I'll talk about the full year then I'll come to first quarter so we are looking at a guidance of 20 to 22% okay >> for the full year >> and uh to us we have a order book of 16,300 odd crores uh which is uh 40 international, 60 domestic. So we definitely are ramping up the execution of our projects. First quarter we are looking at a stable quarter. We are not seeing disruption which is beyond control. So we are managing that disruption and we feel that overall annualized basis we will be good in terms of a guidance.

[00:02:21]>> What about on the margin front?

[00:02:23]>> A margin we actually had given a guidance of 12 11 and a half to 12% last year. We did 11.9% which is very much within the guidance. So 30% growth 11.9% AIDA guidance. Now our guidance now based on the disruption the cost escalation the energy escalation the logistics and the overall energy uh situation we made it 11%.

[00:02:47]>> Okay.

[00:02:47]>> Now if the situation improves globally and uh locally we will definitely look at improving this.

[00:02:53]>> So you're saying margins 11% is the worst case scenario. I would say around 11% but look I can't promise the geopolitical situation what happens absolutely no one's going to catch you by the neck on this because you're being candid enough to come out and say that okay >> and that's actually a good form of honesty but just to put a little bit of perspective you know customers one is international and one is your domestic >> how are the demand trends looking like are the international ones delaying the orders or it's going as it is and in Indian also Is there any kind of a delay here as well because at times orders get delayed also in this answer?

[00:03:31]>> I mean here you know the question is orders are very strong. The question is about execution. So are clients delaying execution?

[00:03:38]>> So I won't say they are delaying >> in India for sure. There could be a right of way or some uh hurdle on the ground which is a normal way of life in a EBC company >> and all our clients are mari clients which is you know the central utility all top-notch private clients. So they are themselves wanting to expedite things and we are supporting that process as professional people uh partners working with them. Globally we work with multinational funding agencies. We don't work with anybody else. So we are very clear that those world banks and uh African development banks are very keen to expedite the project and close it with utilities. So the execution may take a little bit of drop because of the geopolitical global situation but we as a company as a team are very confident that we'll meet our 20% and we are good with that.

[00:04:30]>> Okay. The other question I have for you is in terms of the order book now 16,400 odd crores is what I'm looking at. Now how much of this is actually a L1 pipeline and how much of it is actual orders which have already dropped into your kitty? So actually all 16,000 is orders in hand.

[00:04:48]>> Okay.

[00:04:48]>> And my L1 is very small or 50 crores.

[00:04:50]>> Okay. And any further L1s that you're expecting in terms of pipeline? Yes.

[00:04:56]>> Number one. And two, within that pipeline as well, how is it going to look like between international and domestic?

[00:05:04]So we have bid around 6,000 odd crores of jobs >> in the last quarter which have yet to be you know uh opened in terms of tenders and we are looking at at least 20% uh hopefully uh win ratio. It's pretty much split between domestic and international 50/50. So let's hope for the best and uh at least we should garner uh 1,500 to 2,000 crores of orders out of this.

[00:05:30]>> Right. uh Randep G apart from that just just wanted to understand what's your average cost of borrowing and debt levels if any and the debt reduction plans for it because that's also pretty much important in times like this.

[00:05:41]>> So actually we've reduced our net debt from 500 odd crores to around 274. So 200 in fact 274 is the net debt reduction we have done this year. Uh we feel that we can maintain this. uh net working capital days has come down from uh 91 to 81 we reduced 10 days and our cash flows have improved almost uh year end was 800 odd crores against 400 odd crores last year so we are very clear that financial strength of an EPC company is what we want to maintain and better and we're looking at bettering our NWC days you know sub 80 >> okay that's that's very strong >> important part uh capeex what does that look like because I think the booty booty green field plant is something that is awaited as well. So how are you looking at the capeex on that front or is it already incurred and what's the peak uh revenues that you're seeing out of this and by when? So uh we have already started the work at Bhuturi. The >> production has started as of end April.

[00:06:47]>> We've announced that and uh this year capex and that was part of last year capex. So there's no need for any new capex there.

[00:06:55]>> Uh we have looked at 200 odd crores of capex. There is some plant upgradation equipment in the factories which is around 30 odd crores.

[00:07:03]uh we also have uh TNP tools, plants, equipments to execute our 16,000 cr order book which is around 150 odd crores and then there is for our civil business some machinery we need around 20 odd crores and then we have our you know IT and other expenses so that's around 200 crores but this is staggered this is not going to happen in immediately ASAP and what is more important is that we are very prudent in terms of how do we look at internal acruals to fund this >> okay so good balance sheet strength is what you're seeing as well in terms of visibility, good visibility in terms of order book as well. Uh so I think interesting uh setup that we're looking at from here on though I think the markets are reacting to the way fourth quarter numbers uh have panned out. So I think that's what we need to take with a pinch of salt >> plan because I had given a guidance of 27% we did 30.

[00:07:53]>> So okay tell me one last quick question.

[00:07:55]What do you think are investors not happy with according to you? uh I think uh the they should look at the year picture the promise the guidance on revenue and a bit which we've achieved rather than just looking at a 3-month horizon which has global disruptions and you know delays which have happened. So for us I would request our stakeholders to look at the annualized numbers and theida and we've kept our guidance and we will continue to do so.

[00:08:22]>> Okay, looking forward. Thank you so much Mr. Naron for joining in. It's always a pleasure uh to have you as well. So that was the management of Trans Rail.