Australian partner UGL mulls exiting Texmaco Rail Joint Venturre

Mumbai: Rail freight car manufacturer and engineering services firm Texmaco Rail & Engineering Ltd today said its Joint Venture partner Australia-based UGL Ltd has initiated a discussion to exit from the Joint Venture due to drying up of orders in the Australian market.

“In view of downturn in locomotive sales in Australia impacting throughput volume of UGL, the JV facility, Texmaco Rail Pvt Ltd, which was set up in India primarily for catering to the requirements of Australian market through UGL, is starved of orders and not able to operate to its potential,” Texmaco Rail & Engineering Ltd said in a BSE filing.

It further said: “In view of the above, UGL has initiated discussion about the future of the project, including their view to exit from the joint venture. The matter is under active consideration.”

Texmaco Rail & Engineering Ltd added that there will be “no material impact on the company as the unit was commissioned on April 1, 2013 and in view of the market conditions in Australia, the unit has been operating below capacity.”

In December 2010, UGL Ltd hd announced that it has formalised a joint venture agreement with Texmaco Rail & Engineering Ltd. Texmaco and UGL decided to jointly establish a manufacturing facility at Texmaco’s facility at Belgharia in Kolkata. Texmaco and UGL had commenced commercial production in 2013.

Texmaco Rail stock price

On September 07, 2015, at 12:53 hrs Texmaco Rail and Engineering was quoting at Rs 111.00, down Rs 1.2, or 1.07 percent. The 52-week high of the share was Rs 170.75 and the 52-week low was Rs 75.95. The company’s trailing 12-month (TTM) EPS was at Rs 0.83 per share as per the quarter ended June 2015. The stock’s price-to-earnings (P/E) ratio was 133.73. The latest book value of the company is Rs 28.97 per share. At current value, the price-to-book value of the company is 3.83.