Gayatri Rubbers expects Rs 10-15 crore from FY27 rail projects

Gayatri Rubbers (GRCL) expects Rs 10 crore to Rs 15 crore of FY27 revenue from Vande Bharat and Metro projects, management said, specifying that the estimate excludes the rest of its Indian Railways business. Indian Railways contributes around 50% of GRCL’s revenue, according to management.

How much FY27 revenue does GRCL expect from Vande Bharat and Metro?

GRCL expects approximately Rs 10 crore to Rs 15 crore in FY27 revenue solely from Vande Bharat and Metro projects. Management said it is receiving good orders for Vande Bharat and expects good orders from Metro, but did not divide the FY27 estimate between the two project categories or disclose individual order values.

The Vande Bharat and Metro disclosure identifies a defined stream within GRCL’s railway opportunity rather than its total railway sales. Management separately said the current overall order book was around Rs 10 crore to Rs 12 crore and that 100% of it would be completed in FY27. The call did not specify whether the order book includes the Vande Bharat and Metro revenue estimate.

Management said GRCL was on track for its Rs 55 crore FY27 revenue target and that revenue could exceed that figure. Indian Railways and smart meters were identified as contributors expected to continue in H2 FY27, while H1 FY27 earnings before interest, tax, depreciation and amortisation, or EBITDA, margin was around 23.5%; management expected around 25% in H2, compared with 21.11% in FY26.

How does the Vande Bharat and Metro estimate fit GRCL’s railway business?

The Vande Bharat and Metro estimate sits alongside a broader Indian Railways business that management said accounts for around 50% of GRCL’s revenue. GRCL supplies around 65 products required in a single railway coach and said it serves Indian Railways as a Class I supplier, with timely supply identified by management as a key requirement.

GRCL said it caters to 65 of 75 railway products, leaving 10 products outside its current portfolio. Management identified railway pads and automatic inter-car gangways among the remaining products and said two to three of those remaining products are high-revenue opportunities. The Rs 10 crore to Rs 15 crore Vande Bharat and Metro expectation therefore excludes potential contribution from products that still require approvals.

Management said railway tender timing may affect quarterly revenue but did not expect a significant effect on half-yearly revenue because GRCL has recurring smart-meter orders and serves architectural, automotive and industrial customers. In smart meters, GRCL supplies material in rolls of around 600 units and estimated that one to one-and-a-half metres of its product is used in a single smart meter.

Can GRCL’s existing plants support the rail-project ramp-up?

GRCL has unused capacity at its railway-focused Plant 2, which management said was operating at roughly 35% to 40% utilisation, compared with about 85% at Plant 1. Plant 1 has installed capacity of 200 metric tonnes per month, while Plant 2 is dedicated to specialised railway products, providing capacity headroom for incremental demand without immediate additional infrastructure for current operations.

Management said Plant 1 could reach full utilisation around FY27 and expected Plant 2 to be fully utilised by the end of FY28. At peak use, management estimated Plant 2 could generate about Rs 50 crore to Rs 60 crore of revenue, depending on the machinery used. Those figures are management expectations rather than a disclosed production or revenue commitment.

Management’s medium-term objective is to raise utilisation across existing facilities to 90% to 95%. Against the Rs 50 crore to Rs 60 crore peak revenue estimate for Plant 2, the Rs 10 crore to Rs 15 crore FY27 expectation from Vande Bharat and Metro would represent only part of the plant’s indicated potential, although GRCL did not disclose product allocation, production volumes or margins for those projects.

What approvals and products could change GRCL’s railway mix?

Railway-pad approval is the main disclosed condition for GRCL to consider Plant 3. Management said the approval process has four stages, of which one had been cleared, and complete clearance could take nine to 12 months. Plant 3’s capital expenditure, timeline and funding were therefore not decided because management said it would consider the plant after railway-pad approval.

Management said final approval from the Research Designs and Standards Organisation, or RDSO, for a new product usually takes 15 to 18 months. For the railway-pad application, GRCL expected approval in around 12 months; two months had already passed, leaving an estimated 10 months. It also said it hoped to obtain railway-pad approval by FY28 and expected pads to contribute to FY28 revenue.

The company described railway pads as a high-entry-barrier product because RDSO process inspection examines manufacturing processes and raw materials. Management estimated a 20% to 25% margin from railway pads if approval is received, while noting that manufacturing timing would determine the outcome. Separately, GRCL said specialised rubber-pipe supplies are expected to commence in the first half of 2027.

What are the other disclosed FY27 and FY28 growth drivers?

GRCL said it does not expect much increase in smart-meter demand personally, but management is hopeful about Indian Railways and railway pads. The company expects railway-pad approval by FY28 and said the product would contribute to FY28 revenue if approved, while Vande Bharat and Metro are expected to generate Rs 10 crore to Rs 15 crore in FY27.

Exports remain at a preparatory stage rather than a quantified revenue driver. Management said 70% of required export documents, permissions and certificates had been completed, while the remaining 30% involved tests and criteria fulfilment for intended markets, including European countries. GRCL did not provide an export-revenue forecast.

GRCL also said a prototype for gas and water meter applications had been accepted by Genus, while its specialised EPDM rubber components supplied to ISRO had completed prototype delivery and material clearance. Management said future ISRO demand depends on the customer issuing a tender, so it did not describe that prototype order as recurring revenue.

Conclusion

GRCL’s Rs 10 crore to Rs 15 crore FY27 expectation gives a specific value to its Vande Bharat and Metro opportunity while keeping it separate from a wider Indian Railways business that management said contributes around 50% of revenue. The Rs 55 crore FY27 revenue target, Rs 10 crore to Rs 12 crore current order book and Plant 2 utilisation of roughly 35% to 40% provide the operating context, but the call gave no project-level order split or Metro-order timing.

The next disclosed milestones are potential Plant 1 full utilisation around FY27, expected Plant 2 full utilisation by the end of FY28 and an estimated further 10 months for railway-pad approval. Management said Plant 3 would be considered only after that approval, while specialised rubber-pipe supplies are expected to begin in the first half of 2027.