| Ramping up the high-value business… Texmaco is the largest wagon manufacturer in India with the comparative advantage of outstanding infrastructure in the industry. The company also has its own steel foundry through which it sources its raw materials. This gives Texmaco a cost advantage and helps in maintaining the profitability margin. Indian Railways (IR) plans to add 62,000 wagons in the Eleventh Five Year Plan. Texmaco is well positioned to reap the benefits of immense opportunities offered by IR. The company enjoys a 25% market share in the wagon manufacturing business and is currently diversifying into manufacturing of high margin EMU coaches, metro coaches and locomotives. This augurs well for Texmaco. Texmaco delivered its first locomotive shell to the Chittaranjan Locomotive in Q3FY10. It is a high value product addition for Texmaco and is expected to further contribute to the topline and bottomline, going forward. Land development and piling for the EMU plant has started and foundry modernisation is also on track. Even during the slowdown, rail freight traffic has grown by 7.1% to 501.3 million tonnes (MT) in April-October 2009 compared to the corresponding period last year. Growing freight and passenger traffic along with the need to improve the efficiency will trigger higher demand for wagons, coaches and locomotives. With the unprecedented increase in freight and passenger traffic, Texmaco has a current order book of ~4300 wagons (58% is from the IR). The company is likely to fetch an order of 1,700 BCNA HS in H2FY10E. A tender for 10,000 wagons is to be released in the coming months. Orders from private rail operators like Gateway Distriparks, Adani Logistics and Sical are also picking up. | 
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