Texmaco Rail said it will invest up to ₹200 crore over the next three to five years in its subsidiary, Texmaco Defence Technologies Ltd., as part of its entry into the defence manufacturing business.
The company outlined the investment alongside its March quarter earnings, where management also highlighted strong long-term opportunities across railways, exports and defence.
Texmaco said Indian Railways is expected to place orders for 1.5 lakh to 2 lakh wagons, while demand for 25,000 to 30,000 wagons is anticipated over the next five years.
The company currently holds around 40% market share in the private wagons segment and expects increased export opportunities from Africa.
A major portion of its ₹4,045 crore export order from Tsiko Africa Logistics is expected to be executed in FY28.
Texmaco also said its broader “Texmaco 2.0” transformation plan could involve total capex of ₹1,500 crore to ₹2,000 crore.
The company added that wheels manufactured internally will be used for captive consumption as well as for secured business orders.
As part of its expansion strategy, Texmaco has also collaborated with Sigma Rail Systems in areas such as railway signalling, safety systems and power electronics.
Management, however, acknowledged that large international contracts have been impacted by geopolitical challenges, with claims related to ongoing projects posing a potential risk of up to ₹700 crore in a worst-case scenario.
The company said provisions may need to be made against free reserves given the uncertainty around timelines and cost recoveries.
Separately, HFCL’s board has approved the establishment of a defence manufacturing facility in Andhra Pradesh for the production of Multi-Mode Hand Grenades (MMHG) and similar defence products.
The project will involve an initial investment of ₹230 crore and is expected to be completed by December 2027.
HFCL said the proposed facility will enhance its defence manufacturing capabilities and create a platform for long-term growth in the segment.
The company added that the investment aligns with India’s “Aatmanirbharta” initiative aimed at boosting domestic defence production.
HFCL highlighted that both domestic and global defence sectors are witnessing strong growth due to geopolitical tensions, increased focus on national security and rising investments in advanced defence technologies.
The company believes India’s push towards import substitution, indigenisation and long-term defence procurement programmes presents a significant opportunity for domestic manufacturers.
The facility is expected to enable HFCL to design, develop and manufacture advanced defence systems going forward.
