The railway industry is developing quickly. Innovation and cutting-edge technology are being welcomed by the sector. As a result, railway OEMs are crucial in propelling this change. Increasing safety and efficiency is the main priority for new and established businesses. Concurrently, there is a growing need for sustainable and fast train networks worldwide.
In addition, train operations are changing due to smart technologies like AI and IoT. One such company that has come under the spotlight is Concord Control Systems. The company specializes in providing cutting-edge train control technologies. Concord is also dedicated to enhancing rail performance and safety. Consequently, it is fueling the technological revolution in the sector.
Industry Overview
The railway rolling stock market is growing steadily, projected to reach $6.43 billion by 2034 from $3.87 billion in 2024, with a 5.2% CAGR. Investments in infrastructure and digital solutions are driving this expansion. Railway OEM companies are playing a vital role, in manufacturing essential components for trains, such as locomotives, passenger coaches, freight wagons, and metro cars.
Meanwhile, they are focusing on improving fuel efficiency, safety, and performance. Additionally, OEMs develop control systems, braking solutions, and propulsion technologies. Consequently, their innovations are transforming rail transportation. Overall, the future of rail infrastructure looks promising as technology continues to shape the industry.
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Added to this, the Indian government’s constant push for upgrading Indian Railways has played a critical role in enhancing the sector. Capital expenditure in the railways sector is set to increase by 76% over the next five years, reaching ₹2.55 lakh crore. The focus on dedicated tracks for coal and mineral transport, port connectivity, and resolving congestion will further boost efficiency and capacity.
Concord Control System is one such company that has come out as an underdog in the rail industry and seems to be punching beyond its weight and directly challenging the established players like IRCON and RailTel.
Company Overview Of Concord Control Systems
Concord Control Systems has its headquarters in Lucknow, India. The founders established the company in 2011, and it currently employs more than 150-200 specialists. The business dedicates itself to quality and innovation, specializing in electrical and electronic goods for Indian Railways. As an ISO 9001:2015 certified company, it fulfills international standards, promoting excellence in all facets of its business operations.
The company produces a variety of goods that are necessary for railroad operations, such as safety equipment, brake solutions, control systems, PCB for coaches, power transition systems between coaches, fans, emergency lights, etc. Concord is a source certified by the Indian Railway and RDSO, and it is always creating new products to satisfy the expanding needs of the market.
The company ensures both high quality and sustainability in its goods by prioritizing zero errors in production and implementing eco-friendly manufacturing procedures.
Products
The company’s product line can be classified into 2 major groups:
- Railway Electrification
- Battery chargers
- Control and distribution panels
- Testing Machines
- Coaches
- Emergency Lights
- Coupler
- Bellows
- Fans
Subsidiaries/ Joint Ventures
Concord Control Systems Limited has three subsidiaries/joint ventures:
1. Progota India Pvt Ltd (26% holding)
- Associate company acquired in 2023
- Focuses on Kavach technology for Indian Railways
- Aims to increase speed limits and improve safety
2. Advanced Rail Controls Pvt Ltd (90% holding)
- Subsidiary acquired in 2024
- Specializes in locomotive communication products
3. Concord Lab to Market Innovations Pvt Ltd (50% holding)
- Associate company acquired in 2023
- Develop diagnostic tools in partnership with IISC Bengaluru
- Notable products: Wheel Impact Load Detector and Uneven Loading System
Concord is shifting its focus from product-based to research-based problem-solving for railways. The company is constantly investing in research-oriented firms and integrating them into its railway ecosystem post-acquisition.
Acquisitions
Concord Control Systems Limited (Concord) acquired a majority stake in Advanced Rail Controls Private Limited (Advanced Rail), a pioneering company in railway technology in May 2024. This strategic investment strengthened Concord’s global position in the railway technology market.
The acquisition reflects Concord’s ongoing commitment to creating long-term value for stakeholders while advancing rail transportation. By integrating Advanced Rail’s innovative technologies, Concord is enhancing its capabilities and providing solutions that meet both global and Indian railway demands.
Concord marks a key milestone in its mission to offer cutting-edge, multi-platform solutions in the railway industry with this acquisition. By combining expertise, Concord and Advanced Rail position themselves to drive advancements in signaling, control systems, and infrastructure management.
The companies are preparing to explore new growth opportunities together, both in domestic and international markets. Ultimately, the partnership aims to deliver innovative solutions that cater to the evolving needs of railway operators worldwide.
Investment by Ace Investors
Concord Control System’s shares surged 5% on 3rd September 2024 hitting the upper circuit at Rs 1,870.40. The primary reason for this could be attributed to the approval by the company’s board for issuing 3,18,472 equity shares to non-promoters on a preferential basis. This move aligns with Concord’s growth strategy in the railway technology sector. The share price jump reflects investor confidence in the company’s prospects.
Notable investors have participated in this preferential issue. Ashish Rameshchandra Kacholia will be receiving a 1.21% stake. Asha Mukul Agrawal, wife of investor Mukul Agrawal, will also get a 1.52% stake. This interest from prominent investors could boost Concord’s market position. It may also help the company capitalize on the growing opportunities in India’s expanding railway infrastructure.
Financial Highlights Of Concord Control Systems
The company has shown strong financial performance in recent years. Its revenue has grown steadily, increasing by 313% from ₹15.87 crore in March 2020 to ₹65.52 crore in March 2024.
Meanwhile, the company’s net profit has surged by 1,132% over the same period, rising from ₹1.04 crore to ₹12.81 crore. Furthermore, the operating profit margin has significantly improved, climbing from 9.77% in 2020 to an impressive 27.08% in 2024. The company’s operating profit is also consistently growing. It has increased by 1,045%, from ₹1.55 crore in March 2020 to ₹17.74 crore in March 2024.
The earnings per share have risen dramatically. They have increased by 782% over the four years, from ₹2.49 to ₹21.97. These financial indicators reflect the company’s strong market position. It is effectively managing its operations and is well-positioned for future growth.
Revenue Breakup: Product Category Wise
The revenue mix of Concord has changed over the years. Though coaching products have dominated their share has fluctuated. It peaked in FY23 at 92.39% but decreased slightly in FY24. While the traction products have shown a mixed trend. Their share dropped in FY23 but is now rebounding.
Meanwhile, the “Others” category has been maintaining a small but steady presence. Overall, the company is experiencing shifts in its product category distribution. These changes are reflecting evolving market demands and Concord’s strategic focus.
Order Book
The company has witnessed a significant leap in its order book over the last 3 years. The order book went up from 37 crores to 197 crores between FY23-24 indicating a 5-fold jump. The primary reason is the government’s push for modernizing the railway sector by introducing better safety features in the form of Kavach control system.
The government also plans to modernize the coaches of the trains and introduce a higher number of Vande Bharat trains which is further creating opportunities for the company to enhance its order book.
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Future Outlook Of Concord Control Systems
- The corporation prioritizes energy conservation and is taking numerous measures at its manufacturing facilities to establish a sustainable future by lowering its energy use footprint. It also cuts down on unnecessary loads to increase productivity and conserve power during every operation.
- The company is aiming to expand its sales and cater to a higher number of railway and transitional projects that the Indian Rail Ministry is announcing.
- According to the management, the company is targeting revenue growth at 40%-50% CAGR in the coming 3 to 5 years.
- The company is also targeting to maintain EBITDA margins in the range of 23% to 25%
Key Metrics Of Concord Control Systems
Conclusion
Concord Control Systems shows strong potential in the growing railway industry. The company’s focus on innovation and quality has led to impressive financial growth. Its revenue and profits have risen sharply in recent years. The acquisition of Advanced Rail Controls strengthens Concord’s market position.
However, the high P/E ratio of 91.43 suggests the stock may be overvalued. Still, with the Indian government’s push for railway upgrades, Concord seems well-positioned for future growth. The company’s commitment to energy conservation also aligns with sustainability trends.
Yet, challenges may lie ahead in a competitive market. Question for the readers: Will Concord maintain its growth trajectory in the face of established players? How might future railway projects and technological advancements impact the company’s prospects? Comment below.
Written By Dipangshu Kundu
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