The government of India allocated ₹576.9 billion in the Budget 2025 to buy 200 Vande Bharat trains. This allocation demonstrates India’s strong push towards rail modernisation, as the government aims to launch 400 Vande Bharat trains in the coming years. The estimated opportunity size is about ₹600 billion for Vande Bharat and ₹650 billion for other variants of Vande Bharat trains, as per Titagarh management.
Notably, the demand for Vande Bharat is also creating demand for ancillary services. From propulsion systems to forged wheels, key suppliers are emerging as key beneficiaries of India’s semi-high-speed rail ambitions.
Here are four crucial companies engaged in the manufacturing of Vande Bharat trains…
#1 Titagarh Rail Systems: Building the backbone of India’s trains with advanced propulsion.
Titagarh Rail Systems is India’s only private-sector company that is engaged in the manufacturing of both freight and passenger rolling stock. It operates in two main business segments: Freight Rail Systems, primarily focusing on Railway Wagons and Steel Castings, and Passenger Rail Systems, which includes Metro Coaches, Passenger Coaches, and Propulsion Systems.
Vande Bharat orders drive passenger segment growth
Within passenger rail systems, Titagarh is engaged in the production and development of Vande Bharat trains, particularly the sleeper variant. As of 31 March 2025, Vande Bharat train orders constitute about 62% of Titagarh’s consolidated order book, compared to roughly 5-6% in FY23. In addition, it also won orders worth ₹25 billion during Q1FY26.
Titagarh has also secured a prestigious ₹240 billion contract for the manufacture and maintenance of 80 Vande Bharat trainsets. Bharat Heavy Electricals and Titagarh are executing this contract as a consortium. The project aims to design, develop, and manufacture 80 indigenously semi-high-speed sleeper trains with advanced safety and passenger comfort features, as well as maintain these trains for 35 years.
The prototype of the Vande Bharat train is expected to be ready by Q2 FY27, with regular production anticipated from Q4FY27. The delivery schedule outlined in the contract is phased: 8 trains in the first year, 12 in the second, 16 in the third, and 25 trains per year thereafter. It is currently on schedule.
Revenue from this project will start accumulating from FY27. The company believes that long-term maintenance income associated with the Vande Bharat program will be a key driver of growth.
Expanding capacity and strengthening engineering capabilities
For this, the two inaugurated a dedicated production line at the Titagarh Uttarpara plant. It is expected to increase its capacity to 850 coaches per year from 300 right now. In addition, the company has established a new engineering center in Bengaluru to develop advanced train control and monitoring systems and propulsion systems.
This center is expected to play a key role in the implementation of upcoming rolling stock and propulsion projects such as Vande Bharat. Revenue is expected to start contributing from this fiscal year itself. Propulsion systems are expected to yield margins between 15-20%, against the current margin of 11%.
Freight weakness weighs on Q1 performance
From a financial perspective, standalone revenue declined 24.78% year-on-year to ₹6.8 billion in Q1FY26. The company currently gets 88.6% of its revenue from freight rolling stock, with the balance coming from passenger rolling stock. Its performance was affected by poor performance in the freight segment due to lower wagon sales.
Earnings before interest, tax, depreciation, and amortization (EBITDA) also fell 26.1% to ₹752.5 million, while margins fell 20 basis points (bps) to 11.1%. However, profit after tax (PAT) declined by 40% to ₹427.5 million.
From a valuation perspective, Titagarh is trading at a price-to-earnings (P/E) multiple of 50.3x, in line with the 10-year median of 49.5x, and a little higher than the industry (46.3x).
#2 BEML: Driving India’s rail modernisation with indigenous engineering.
BEML’s business activities are divided into three core sectors: Defence and Aerospace, Mining and Construction, and Rail and Metro. It is deeply involved in the development and production of Vande Bharat Sleeper Trains under its Rail and Metro business segment.
Pioneering the Vande Bharat sleeper train
BEML is known for pioneering the development and manufacturing of India’s first Vande Bharat Sleeper Train. BEML developed the train entirely in-house, starting from a clean sheet design since no prior template existed for the sleeper configuration. The first Sleeper Trainset was indigenously designed and manufactured by BEML, and was unveiled on 1 September 2024.
BEML supplied the 1st Vande Bharat Sleeper Trains and completed trials successfully during FY25. The prototype successfully underwent testing, paving the way for large-scale production. It is expected to supply 10 rakes (Train sets) of 16 cars each for Indian Railways. Of this, it expects to deliver 9 trains by December.
Major orders for these advanced train sets are in the pipeline and hold the potential to enhance the company’s revenue substantially. It is already preparing to meet future demand for semi-high-speed train sets and aluminum coaches, which are critical to the modernization agenda of Indian Railways.
Strong order pipeline and improving outlook
From a financial perspective, the company’s revenue stayed flat in Q1FY26 at ₹6.3 billion, while it reported a net loss of ₹600 million (down 8.6% YoY). But, BEML has set an aspirational growth target of at least 25% year-on-year growth in FY26. The management estimates the margin to improve by 150 bps, from 13.2% in FY24.
This improvement is expected due to a favorable product mix (more commuter rail, high-end mining, and defence systems), enhanced contribution from systems, and a reduction in material cost. BEML expects its order inflow in FY26 to be around twice that of FY24 (₹68 billion), and expects to close FY26 with an order book of about ₹230 billion.
Valuation-wise, BEML is trading at a P/E of 60.9x, well-above the 10-year median of 50x, and the industry (38.5x).
#3 BHEL: The core electrical backbone
BHEL is a leading company in the Capital Goods sector, proudly contributing to the Make in India initiative since 1964. It is an integrated power plant equipment manufacturer and a Central Public Sector Undertaking. BHEL is currently executing a prestigious Vande Bharat order in consortium with Titagarh.
The contract involves the manufacturing and supply of 80 Vande Bharat trains. The order also mandates 35 years of maintenance for these trains. The Vande Bharat trains fall under the category of rolling stock offered by BHEL’s Transportation Systems segment.
BHEL’s expertise extends to providing Traction Propulsion Systems for the Semi High Speed Trainset (Vande Bharat). BHEL transformers, control electronics, and other components that power and control the train’s movement. This is the technological heart of the train.
This focus aligns with BHEL’s pivotal role in supporting Indian Railways’ journey toward modernization and indigenization by manufacturing “Made in India” systems and equipment.
From a financial perspective, the company’s revenue stayed flat in Q1FY26 at ₹54.8 billion, while losses more than doubled to ₹4.5 billion, from ₹2.1 billion in Q1FY25. BHEL’s order book stood at ₹1.9 trillion (as of 31 March 2025), which provides revenue visibility of about 6 years. Due to losses, we haven’t assessed its valuation.
#4 Ramkrishna Forgings: Forging the wheels that keep India’s trains moving
Ramakrishna Forgings has over 43 years of experience in the forging industry. It serves 18 countries, maintaining strong footprints in North America and Europe. It manufactures and supplies over 2,000 products across auto and non-auto segments.
It serves key sectors, including Commercial Vehicles, Railways, Mining, Industrial Components (Steel, Cement & Power), and Oil and Gas. It offers various metal processing and value-added services, including hot forging, warm forging, press and press, ring rolling, cold forging, gear grinding, machining, fabrication, aluminum forging, and casting.
Meeting rising demand for forged wheels
The company believes that the large-scale plan to manufacture 200 Vande Bharat Express and other high-speed trains is expected to increase forged wheel demand to about 2 lakh units from 2026 onwards. It has already received one order from BHEL, in addition to one order from Indian Railways for completing the assembled undercarriage supply.
To capitalize on the massive demand for forged wheels, Ramkrishna is the lead partner in the Ramkrishna Titagarh Rail Wheels Limited Joint Venture (JV). The JV will establish Asia’s second-largest manufacturing plant in India to produce 228,000 forged wheels per annum.
The project is estimated to cost ₹20 billion. The total investment required for the first phase, which will augment capacity for over 100,000 machined finish wheels (sufficient until FY28), is estimated to be around ₹16 billion. The second phase of investment (₹4 billion) will only occur once the utilization level exceeds 100,000 wheels.
The plant is “well on track”. It aims to submit samples for approvals for Indian Railways by the last quarter of FY26. The JV has a guaranteed offtake plan of over 80,000 wheels, and it anticipates seeing significant revenue from the supply of 40,000 wheels in FY27.
Subdued Q1 performance hits margin pressures
From a financial perspective, the company’s revenue grew 6% year-on-year to ₹10.2 billion, due to a decrease in realisations. EBITDA fell 12% to ₹1.5 billion, with margin down 298 bps to 14.6%. PAT declined 78% to ₹120 million. The management indicated that Q1FY26 is the “worst” in terms of profitability and margin levels, with a gradual and steady improvement expected.
Valuation-wise, Ramkrishna is trading at a P/E of 29.4x, well-above the 10-year median of 24.6x, and the industry (29.4x).
Bottomline
The Vande Bharat program is driving a wider industrial opportunity across India. Companies like Titagarh, BEML, BHEL, and Ramkrishna Forgings are not only supplying critical components but also positioning themselves to benefit from the long-term growth of the country’s rail infrastructure. As the network of semi-high-speed trains expands, these hidden gems could become key players in India’s railway transformation.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
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About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
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