Tata AutoComp Systems Diversifies into Railway Business, Aims for 10% Share

Tata AutoComp Systems (TACO), predominantly in the automotive vertical, has diversified into the railway business and is targeting a 10% share of this business as it scales. TACO’s FY26 revenue was Rs 22,266 crore with a net profit of Rs 1,091 crore. From commencing supplies for the Vande Bharat trains, exploring supplies for the bullet train and participating in the pilot run of the Hydrogen-powered trains, TACO is scaling this business. They are now participating in railway tenders and hoping for wins soon. At the TACO level, the company wanted to diversify beyond automotive to reduce the cyclical impact on business and explored adjacent businesses, so the group zeroed in on railways. TACO has forayed into the railway segment through its joint ventures. TACO and Skoda Group have set up a joint venture in India to manufacture railway propulsion systems and components, including converters, drives and auxiliary converters for semi-high-speed and regional trains, metros and light rail vehicles. TM Automotive Seating Systems, a 50:50 joint venture between Tata AutoComp Systems Ltd., India, and Magna Seating, is into seating solutions for the mobility market, including railways. The company has another JV, TM FAINSA Railway, with FAINSA, a Spain-based specialist in railway seating systems, which is focused on the railway vertical. TACO Composites, a group company, is also participating in the railway business. Amit Dey, Business Unit Head, TM Seating, and Cluster Head, said there is a serious shortage of propulsion system manufacturers in India, and the Indian Railways leadership felt that more players were needed. The TACO_Skoda JV, set up last year, has begun participating in railway tenders and hopes to clinch its first order. The TM FAINSAL Railway plant is coming up in Chakan, Pune, with capacity to manufacture 50 coaches a month. An initial investment of Rs 50 has been made for this plant. In the propulsion segment, they are working on a couple of tenders, and the journey will commence when they get the orders. The TACO-Skoda factory plant coming up in Pune will manufacture traction motors, auxiliary converters, traction converters, and four to five other items, to enable 60% local sourcing. Investments would be around 250 crore on this plant. This could lead to Rs 800-1,200 crore in annual orders in future. The seating business could become a Rs 500-1,000 crore annual business in 4-5 years. Indian Railways was looking to widen its supplier base for the Vande Bharat trains, and reached out to the TACO companies, Dey said. TACO forayed into the railway segment with seating systems, and almost 50% of the Vande Bharat seating, including chair car and sleeper coaches, is supplied by their companies. They have already supplied to two trains, and four are in the pipeline and will soon be put to use. Seating systems account for around 6-8% of the cost on a coach. Buddhiraj Deshmukh, Business Unit Head – TACO AI and Cluster Head, said they have started their journey with the hydrogen train. They supplied the battery thermal management systems. They would be building energy-efficient HVAC systems, Deshmukh said. TACO is also exploring opportunities in the high-speed or Bullet Train segment. According to Dey, TACO will get into Vande Bharat side panels, lavatories, flooring, doors and electrical systems.