01 — At a Glance
The Wagon Maker With Ambitions Bigger Than Its Wheel Set Supply
- 52-Week High / Low₹189 / ₹87.2
- Q3 FY26 Revenue₹1,041 Cr
- Q3 FY26 PAT₹40.5 Cr
- Q3 FY26 EPS₹0.95
- Annualised EPS (Q3×4)₹3.80
- Book Value₹69.4
- Price to Book1.32x
- Order Book (Dec 2025)₹5,661 Cr
- Return (1-Year)-33.5%
- Debt / Equity0.29x
Auditor’s Parking Lot Note: Texmaco Rail just posted Q3 FY26 revenue of ₹1,041 crore, a -4.2% YoY decline. PAT crashed 14% to ₹40.5 crore. Why? Wheel sets. The one component they can’t control has reduced their wagon delivery potential by 20–25% all year. Yet the stock is down 33.5% in one year. The order book is a healthy ₹5,661 crore. The company just announced a “Texmaco 2.0” vision to 2x revenue by FY28–29. The math says “wait for the wheel sets.” The market says “sell everything.”
02 — Introduction
India’s Largest Wagon Maker Has a Problem Money Can’t Solve. Yet.
Texmaco Rail & Engineering is one of those companies where the business model is bulletproof but the execution is currently in a traffic jam. They manufacture 1 out of every 4 freight wagons running on Indian Railways. That’s dominance. No question. They also make steel foundry products, rail electrification equipment, and a bunch of specialized railway infrastructure stuff. Diversified enough to sound impressive at dinner parties. Profitable enough to sleep at night.
But here’s the thing: in Q3 FY26, they sold 2,027 wagons. Management says that’s 20–25% less than their actual capacity because wheel sets—yes, literally the round spinning thing on the bottom—are in short supply globally. The government tightened supply. RDSO (the railway standards body) approved only certain vendors. And Texmaco can’t magic up wheel sets from thin air. So they’re sitting on orders but can’t execute. Profit is stuck in slow traffic on the Delhi-Mumbai highway.
On the concall in Feb 2026, management dropped a strategic bombshell: “Texmaco 2.0.” The vision? Double the revenue to ₹8,000+ crores in 3–4 years, expand into urban rail (metro coaches), wheel sets, propulsion systems, and even orbit conversations with “world-famous global majors” (translation: we’re talking to big companies but can’t name them yet). They also mentioned entering iron pellet manufacturing and mining. Yes, really. From wagons to ore. Why? “To connect with end customers.” Because apparently a wagon company was just dying to become a mining company.
The market doesn’t believe them. The stock is down 33.5% in one year. But the fundamentals are solid—zero promoter pledges, a ₹5,661 crore order book, and margins that are being crushed only by supply constraints, not demand collapse. Welcome to the paradox of Texmaco Rail: the best worst stock right now.
Concall Gem (Feb 2026): “We are making our business more robust… we want to be a global player.” — Vice Chairman. Then immediately: “We have faced prolonged wheel set availability constraints… progressively easing, but not to the extent where we can improve it further.” Translation: we have big dreams but reality is still sitting in a traffic jam.
03 — Business Model: The Wagon Monopoly That Can’t Even Get Wheels
One Out of Four. But Only If You Can Get Wheel Sets.
Texmaco Rail manufactures freight wagons (84% of revenue in FY25), steel castings (foundry products), rail EPC contracts (electrification, track laying, signalling), and electrical infrastructure. Over 50 years, they’ve shipped 50,000+ wagons. That’s not just market share—that’s an institution. Indian Railways depends on them. Private logistics companies beg them for wagons. They’re also backward integrated: in-house foundry making 48,000 MTPA of steel castings annually. Own the supply chain. Control the quality. Simple.
Except for the one thing they don’t control: wheel sets. RDSO (Research Design and Standards Organisation) is strict. Only approved vendors allowed. Global supply has been tight. The company quantified it on the concall: “wheel set availability is ~60–65% of what we’re asking for.” Imagine running a car factory but only getting 60% of your steering wheels. You’re not selling cars. You’re manufacturing paperweights in the parking lot.
Recent capacity: 10,000 wagons/year (Texmaco main) + 3,000 from Texmaco West (ex-Jindal acquisition, Sep 2024). Foundry doing 48,000 MTPA. Seven manufacturing facilities across West Bengal, Gujarat, Chhattisgarh, Odisha (expansion coming). Private sector demand is rising—steel, cement, automobiles all need wagons. Exports are bouncing back after tariff headwinds. The order book is fat. Volume is just… stuck.
Market Share1 in 4Wagons on IR
9M Wagon Delivery6,176Units FY26
Foundry Capacity48,000MTPA
Order Book₹5,661 CrDec 2025
Texmaco West Integration Note: In Sep 2024, Texmaco acquired Jindal Rail & Infrastructure Limited for ₹614 crore. Specialized in auto and steel wagons for private clients. CFO on the concall: “In last 21 months, we’ve earned profit before tax of ₹230 crore after paying interest.” That’s not capex payoff—that’s real profitability from a diversified customer base. The acquisition is already accretive. But it’s also subject to the same wheel set constraints.
💬 If Texmaco can’t get wheels for 25% of their capacity, why not invest in making their own wheel sets? They mentioned “wheel sets as a focus area.” Think they’ll greenlight the capex?
04 — Financials Overview
Q3 FY26: The Wheel Set Letdown
Result type: Quarterly Results | Q3 FY26 EPS: ₹0.95 | Annualised EPS (Q3×4): ₹3.80 | Full-year FY25 EPS: ₹4.31
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 1,041 | 1,086 | 1,257 | -4.2% | -17.2% |
| Operating Profit | 91 | 91 | 125 | -0.1% | -27.2% |
| OPM % | 9% | 8% | 10% | +100 bps | -100 bps |
| PAT | 39 | 47 | 62 | -14.0% | -37.1% |
| EPS (₹) | 0.95 | 1.18 | 1.55 | -19.5% | -38.7% |
P/E Recalculated: Full-year FY25 EPS ₹4.31 ÷ CMP ₹91.4 = P/E 21.14x (screener shows 22.4x for rolling 12 months, likely including some FY26 weakness). Industry median P/E for capital goods is 28.1x. Texmaco trades BELOW sector median despite being a market leader. Why? Q3 missed due to wheel sets. Q2 was also softer. Investors are pricing in a supply-constrained year. If wheel sets ease, repricing will be violent.
05 — Valuation: Fair Value Range
What’s This Wagon Maker Worth When Wheels Aren’t Broken?
