- Shares of railway companies rallied in trade on Thursday after the consortiums led by Rail Vikas Nigam Ltd., and Bharat Heavy Electricals Ltd., emerged as key winners for manufacturing and maintenance of 200 Vande Bharat trainset.
According to a flashnote by Macquaire Research, Rail Vikas Nigam Ltd. led consortium with Russia’s CJSC Transmashholding emerged as the L1 bidder for the 200 Vande Bharat trainset order, at an estimated cost of Rs 12 crore per trainset.
Also, Bharat Heavy Electricals Ltd., in consortium with Titagarh Wagons, has emerged has the L2 bidder for the same 200 Vande Bharat trainset order, with an estimated cost of Rs 14 crore per trainset.
The total order size of the 200 Vande Bharat trainset order is expected to be Rs 5,800 crore with Rs 2,400-2,600 crore being the upfront amount split between the L1 and L2 bidders.
As per the tender documents, the lowest bidder will manufacture 120 trainsets and the second-lowest bidder will manufacture 80 trainsets, only if the second lowest bidder can match the L1 bid’s price.
Siemens India Ltd., in consortium with BEML Ltd., Alstom and Medha, were the other bidders in this tender.
Macquaire On Railway Stocks
- Assigns an “underperform” for Bharat Heavy Electricals Ltd. and maintains an “outperform” rating on Siemens India Ltd..
- Rail Vikas Nigam Ltd., BEML Ltd. and Titagarh Wagons Ltd. are not rated by the brokerage.
- Macquaire Research expects a 4% of additional upside for Bharat Heavy Electricals Ltd. however it expressed a negative sentiment for Siemens.
- Brokerage sees the L2 bid win as a positive news for Bharat Heavy Electricals Ltd. with an upfront amount of Rs 480 crore that can be recognized over the next 4-5 years. This implies a 3-4% rise in the revenue for FY25E.
- Siemens, on the other hand, has missed out on the 200 Vande Bharat trainset order and not participated in the 100 Aluminium body Vande Bharat trainset order.
- Over the medium term, the margin profile of these orders will remain key, given aggressive bidding by players and heightened competitive intensity.
Shares of Rail Vikas Nigam Ltd., Titagarh Wagons Ltd., and Bharat Heavy Electricals Ltd. advanced in trade after the project win, whereas, Siemens India Ltd. declined following the missed project.
Source: Exchange filing
