Texmaco Rail & Engineering consortium win freight railway contract worth Rs 1800 crore

A four company consortium of Texmaco Rail & Engineering Ltd, Hitachi Japan, Mitsui & Co. and Hitachi India has won a contract for Design and Construction of Signal and Telecom works - STP5 (the project) a part of the dedicated freight corridor between the Delhi and Mumbai industrial cluster, informed the company in an exchange filing.

The contract is worth a total of Rs 1,800 crores which will cover the 915 km distance between Rewari in the State of Haryana and Vadodara in the State of Gujarat. This is the biggest order ever placed in India for Japanese signalling equipment. For this project, Hitachi Japan, as consortium leader, will manufacture key equipment for the signaling system. Mitsui will provide overall coordination with (Dedicated Freight Corridor Corporation of India Ltd) DFCCIL and related agencies in Japan and India. Hitachi India and Texmaco will supply the domestic equipment and Texmaco will also carry out the installation.

Texmaco Rail & Engineering shares surged over 8 per cent in the early morning trade as the company announced the contract order. It touched an intra– day high of Rs 149. Texmaco's stock has smartly rallied over 42 per cent in the past three months on the back of positive developmens like stake purchases and order wins. The main contributor for this rise has been the approval of rail projects worth Rs 9,598 crore by the Cabinet Committee on Economic Affairs has been a big positive for all the railways stocks especially strong player like Texmaco Rail.

The one-year performance of most of the railway stocks has been robust this time (versus the broader markets), as the government announced its highest-ever capital expenditure (capex) plan for the railways in FY16.

Texmaco, with its recent acquisition of Kalindee Rail and Bright Power Projects, will garner a bigger pie of the railway capex. Importantly, the company now has a diversified presence in railway wagons, signalling, and laying tracks and bridges. A merger will also enable Texmaco to bid for larger projects in the near future.

Texmaco is a part of Adventz Group which is a Total Railway Solution Company, engaged in the business of designing and manufacturing of rolling stock, hydro mechanical equipment and through its subsidary installation of ballastless track, signalling , telecommunication systems etc.