JSPL eyes Rs 3,500-cr revenue from rail sector in next 3 yrs

Naveen Jindal-led JSPL expects revenues of up to Rs 3,500 crore from its railways segment in the next 2-3 years buoyed by the government's ambitious push to the infrastructure segment, including railways.
Jindal Steel and Power Ltd (JSPL) has a total rail making capacity of 60,000 tonnes per month, of which 30,000 tonnes is head hardened rails.
JSPL Chairman Naveen Jindal said head hardened rails are ready for commercial production and the firm is the only company in the country manufacturing the speciality product.
"The government has announced a mega infrastructure push, which includes huge initiatives in railways as well as setting up metro projects in several cities. This will lead to huge demand. The firm expects revenues of Rs 3,300-3,500 crore per annum from the railways business in the next 2-3 years," JSPL Group CEO and Managing Director Ravi Uppal said here.

The firm expects a revenue of Rs 2,400 in the current fiscal ending March 2017.
Breaking down the figures, he said that the government's requirement is around 8 lakh tonnes, which JSPL expects will jump 1.2 million tonnes (MT) of which about 2-3 LT will be just head hardened rails.

Railways have formulated a medium-term capital investment plan of Rs 8.56 lakh crore for the next five years. Besides, it has got a budgetary allocation of Rs 1.21 lakh crore for the current fiscal ending March 2017.
Under its push to ramp up urbanisation, the government is investing on metro rail projects, which JSPL says will help increase demand for head hardened rails.

Besides, there is around 915 kms of metro projects in cities such as Delhi's Phase 3 and 4, Mumbai, Chennai Kolkata and Hyderabad in progress.
Also another 1,215 kms of metro rail projects are also planned in cities such as Kanpur, Patna, Bhopal and Vijaywada.
A km of rail line requires around 260 tonnes of steel. It is expected that around 5 lakh tonnes of steel (head hardened rails) will be required in the next 9 years for these metro rail projects, the company said.
JSPl has invested Rs 200 crore on setting up the head hardened rail project, which has The landmark achievement also propels JSPL catapulted it into the club of 7 global steel majors, who have this capability in the world.

It has been set up in technical collaboration with SMS MEER of Germany.
Head Hardening technology entails a special heat treatment process which requires precise temperature control to achieve nearly 50 per cent higher hardness as compared to a normal rail.
Uppal said the company is working in making its head hardened rails competitive in the Indian market against the standard rails.
At present, the landed price of imported head hardened rails is around Rs 75,000 per tonne, while the domestic price of standard rails cost Rs 55,000 a tonne.