Sep 8, 2016

Jindal Rail Infra Ltd to start supplying head hardened rails in India

JSPL to become India’s first maker of Head Hardened Rails with total rail making capacity of 60,000 tonnes per month, of which 30,000 tonnes is head hardened rails. JSPL eyes Rs.3,500 Crore revenue from rail sector in next 3 years. The plant in Chhattisgarh, set up in technical collaboration with German SMS Meer Gmbh, has the capacity to deliver 30,000 tonnes of head-hardened rails per month.
New Delhi: Jindal Steel and Power Ltd said on Tuesday the company is set to supply rails for the high-speed railway and metro rail projects with its Rs.200-crore plant, set up in collaboration with SMS Meer, Germany, coming on stream.

The plant is capable of producing 30,000 tonnes of head hardened rails a month and it aims to substitute imports, which metro rail developers were forced to use till now.

“The declared metro rail projects itself give us a market of 0.5 million tonnes over the next two-three years. With this new line of products, we expect that our rail business will yield Rs.200 crore of revenues a month from this fiscal (2016-17) as compared to Rs.45 crore a month in the previous fiscal,” said Ravi Uppal, Managing Director and Group Chief Executive Officer, Jindal Steel and Power Ltd.

Uppal said currently, the landed price of imported head hardened rails is around Rs.75,000 per tonne, while normal imported rails cost Rs.50-55,000 per tonne.

“We would aim to bring down this cost difference. Apart from getting head hardened rails at a cheaper price, buyers can also benefit from shorter delivery times and would also be able to order as much as they need rather than bulk orders, which they need to place for imports,” he added.

Jindal Steel and Power Ltd expects its entire rail business to contribute Rs.1,800 crore to Rs.2,000 crore to its revenues in the 2016-17 fiscal which would be scaled up to over Rs.3,300 crore over the next two-three years.

JSPL partners German firm M/s SMS Meer Gmbh, for high-speed rail tracks project. 

Already, the company’s order book for normal rails is 3 lakh tonnes, which would be delivered over the next few months.

Head hardened rails are typically used in metro rail projects as well as on high-speed freight corridors. 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.

On the remarkable achievement Mr. Naveen Jindal Chairman – JSPL said “In line with the Government’s thrust on ‘Make in India’ JSPL has successfully completed trials of Head Hardened Rails and is all set for commercial production. JSPL being the only producer of Head Hardened Rails in the country is poised to play an important role in the growth of India’s rail infrastructure.”

Investors gave thumbs up to the news as shares of JSPL surged by 1.35 per cent to end at Rs 82.65 a piece on the BSE on Tuesday.

“More than the boost to the infrastructure sector, I feel that the economy would benefit from the reduced import dependence and the improved investment demand due to domestic manufacturing of such rails,” said Devendra Kumar Pant, chief economist, India Ratings.