Kolkata, Aug 12 (PTI) Titagarh Rail Systems Ltd (TRSL) on Tuesday said the company will incorporate a wholly-owned subsidiary, Titagarh Naval Systems Ltd (TNSL), and is open to bringing in strategic partners or investors to scale up operations for shipbuilding business.

The company's board has approved, in principle, the transfer of the shipbuilding, maintenance and services (SMS) business to TNSL, subject to regulatory clearances.

The move will allow TRSL to concentrate on its core railway systems business, while enabling the new entity to capitalise on opportunities in the maritime sector under various government initiatives, the company said in a statement.

"The new company will pursue its growth opportunity independently or through the induction of strategic partners or investors, as the case may be," it said.

Leveraging its track record of delivering over 35 vessels to the Indian Navy, Coast Guard, National Institute of Ocean Technology, and Garden Reach Shipbuilders & Engineers, TNSL plans to expand its shipbuilding facility at Falta in West Bengal.

Acquired from Precision Shipyard in 2023, the facility has a production capacity of 12-16 vessels a year, up to 180 metres in length.

"This strategic move will strengthen our presence in the defence sector and open new growth avenues," the company said, adding that TNSL will "pursue opportunities independently or through collaborations".

In the June quarter, TRSL secured fresh orders worth Rs 2,092 crore (excluding GST), taking its total order book to Rs 26,000 crore.

Freight Rail Systems orders alone stood at Rs 4,114 crore, covering 10,772 wagons, the company said.

Meanwhile, TRSL's consolidated net profit fell 53.8 per cent to Rs 30.94 crore in Q1 FY'26 from Rs 67.01 crore a year earlier, mainly due to lower wheelset supplies, though the company said this has now stabilised. Revenue from operations dropped 24.77 per cent year-on-year to Rs 679.3 crore in the quarter ended June 30, 2025.

Despite the weak results, Titagarh Rail shares closed 3.26 per cent higher at Rs 801.45 a script on Tuesday.

Promoters have secured shareholders' approval to acquire 21.11 lakh convertible warrants at Rs 947 each, totalling Rs 199.99 crore.

Back in 2024, one of the promoters, Rashmi Chowdhary, had sold 26.93 lakh shares at Rs 1,618 each.

The stock had touched an all-time high of Rs 1,859 a share in June 2024. PTI BSM BDC

Corporate restructuring: transfer of shipbuilding business to a new wholly owned subsidiary, open to strategic partners for scaling. Titagarh Rail will incorporate a wholly owned subsidiary, Titagarh Naval Systems Ltd, and transfer its shipbuilding, maintenance and services business to that entity subject to regulatory clearances, enabling the parent to focus on railway systems while the new company pursues maritime and defence opportunities independently or through strategic partners, leveraging an existing Falta facility and planned expansion.