A. Total Indian Rail Network = 1,15,000 KM
B. Cost/Km of deployment (basis last order received) = 0.5 Crore
C. Size of Opportunity for TCAS Deployment on Tracks (A*B) = 57,500 Crore
D. No of Operating Trains in Indian Railway – 22,000
Freight – 9000
Passenger – 13000
E. Cost of Kavach Instrument/Train (basis last order received) – 0.7 Crore
F. Hence Size of Opportunity for Kavach Instruments on Train – ~15,000 Crore
G. Hence Total Opportunity Size of Kavach Instrument + Track Deployment = ~73,000 Crore
Plan is to add 4000 – 5000 Km on TCAS every year, thus it will take approx 29-30 years to deploy TCAS on 1,15,000 km. Since this is govt work, and Modis and Gandhi’s will come an go, we should take atleast 25% buffer on time taken. Thus approx 35 years will be required for this entire opportunity to play out.
Thus Revenue Potential Every year = 73,000/35 = ~2100 Crore per year
Assuming 50% Business goes to HBL – Revenue potential for HBL will be 1050 Crore
Assuming this is a 10% Net margin Business (i.e after Working Capital Cost, assuming that Op Margin is 15% ) will lead to 100 Crore incremental Profit
Existing Operating Profit = 100 Crore
So max PAT = 200 Crore (Incremental + Existing)
Giving 20 Times Multiple to this PAT – will lead to market cap of 4000 Crore, means an upside of roughly 30% max
Is this correct assessment @hitesh2710 @Donald @basumallick @Rokrdude @Anant
PS : Value per order was derived from following
deployment of 4000-5000 km per year was derviced from
Correlation of my working on Price/unit done from
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