Company:
Neetu Yoshi is a metallurgical engineering company specializing in the manufacturing of critical safety spares for Indian Railways. Incorporated in 2020, they are a RDSO certified Class A Foundry and CNC machining solutions provider, focused overwhelmingly on railway safety components, including assemblies for braking, suspension, propulsion, and coupling.Company is named after their mother Neetu who drowned in an unfortunate accident. Yoshi means good or lucky in Japanese.
They cater to the Railway industry which can be divided into 4 major segments:
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Locomotives - The engine part of the train. Siemens and Altom are leading manufacturer of locomotives
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Coaches - Coaches of a passenger train
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Wagons - Coaches of a freight train
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Track - The railway track itself and all components related to it(ex: the track switching assembly).
Their current focus is on the wagon industry, which can be divided into 3 types of manufacturers:
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Component masters - Manufacturing of components that go into different parts of sub-systems like bogies etc.
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Bogie builders - Sometimes mistaken for the entire coach, bogie is actually the undercarriage assembly each of which holds four wheels and two axles. There are generally 2 bogies per coach.
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Wagon/Coach manufacturers - This is the entire coach that carries either goods or passengers
A bogie:
Timeline:
2020 Trading of scrap from railways
2021 Machining work for component masters
2023 Component master. Setup own manufacturing facility with funds from SIDBI and Central bank.
2026 Bogie builder
This is how the company has progressed, currently they have progressed to component masters and with the new facility going live soon they will be building entire bogies and their aim is to be able to manufacture the entire wagon/coach in the next 3-4 years.
Being incorporated in 2020, it enjoys a lifetime tax benefit. Central Government’s Section 115BAB tax scheme gives a 7.5% lower corporate tax rate for companies that were incorporated between 2019 and 2024 as a new manufacturing entity:
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Neetu Yoshi’s Tax Rate: Approximately 17.5% (15% base tax + 2.5% surcharge/cess).
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Peer/Industry Tax Rate: Approximately 25%.
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Duration: This 7.5% differential is considered a “lifelong” benefit as long as the company maintains its current manufacturing status under the established tax laws.
Management:
Mr.Himanshu Lohia is the face of the company doing all the investor interactions and interviews. His brother, wife and sister are also part of the board. None are from a manufacturing background, have only around 4 years of experience overall, they collectively look after the finance, sales, marketing and corporate governance aspects. All are young and seem to be learning one the job.
The invisible hand guiding Himanshu seems to be his father Mr.Yogesh Lohia who used to own a foundry catering to the railways called Jagadamba Liquified steel.
Kumar Sharat Chandra is an independent director, who used to be principal chief mechanical engineer with Northeast Frontier Railways. Comes with an experience of 33 years. He is very familiar with the Railways operations and he is the one helping them about
Business:
The company’s business can be divided into these segments: Components for wagons and coaches, Tracks, Bridges and structures.
Diversification:
“Last year, we were just approving the parts which were falling in the wagon segment of industry. Within this year, we have developed various different parts for track segments, various different parts for locomotive sections and coach sections, which have given us additional revenue and good margins over that. So, that is our main target to keep diversifying and keep increasing more and more critical and safety components for the Railways.”
Segments:
Focus remains on wagons as the demand is promising, they have developed components for coaches and tracks as well.
Wagons: This is their main focus where they manufacture components for bogies, couplers and other safety components of the wagon industry. With the new facility which can go live in early FY27 they will be manufacturing entire bogies for wagons.
Coaches: They have developed a few safety components that are already contributing to the revenue, they have applied for RDSO approval for a few products and are working with PSUs that are manufacturing coaches for developing components for it.
Tracks: They have developed track components like TWS fitting parts, CMS crossing turnouts for coach sections. They have developed all 36 components for TWS fittings and claim to be one of the first companies to do so. They have received RDSO approval for all of them. With more DFCs being implemented complete freight lines need to be laid down and that’s where they see the demand coming from. They have developed 15 components that are awaiting RDSO approval.
Bridges and structures - No RDSO approval as of Nov 2025, expecting approvals around Feb 2026. Targeting 15-20 Cr revenue in FY2027. This will be done in the land adjacent to existing land. The fabrication part which is common for tracks and bridges and structures will be done there.
Locomotive: This is in the developmental phase, they have developed the axle box housing. No revenues from this yet.
Segmental revenue: 35% from the track industry, another 30 from coach and rest from the wagon for FY26.
Customers:
All companies supplying to the railways including their vendors need to get approvals from respective organizations like RDSO, ICF etc.
The railways ecosystem**:**
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Indian Railways Zones - There are 16 railway zones which are responsible for administration, operation and maintenance.
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Railways manufacturing facilities(PSU) - Indian Railways has several of its manufacturing facilities like Integral Coach Factory (ICF) in Chennai, Rail Coach Factory (RCF) in Kapurthala, Modern Coach Factory (MCF in Raebareli etc.
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Private players - Titagarh wagons, Jupiter wagons, Texmaco, HEI etc.
All the 3 are Neetu Yoshi’s customers. Currently, Neetu Yoshi caters to 50 different customers that include 16 zones of railways, 4 railway manufacturing units, 10 wagon manufacturers and 20 bogie builders.
Supply/Demand:
Railways Zones:
The company gives 12 months of warranty for the components it manufactures, within this period any failure in those products(which hasn’t happened so far) is on Neetu Yoshi. Coming to the maintenance or replacement cycle, bogies in India are overhauled at 75,000 kilometre, where the components are changed. And this replacement is done by the Indian Railways through the process of tendering. Volume of manufacturing has doubled in the last few years so the demand from railway zones will be present.
Private Players:
Currently there are only 2 DFCs(Direct Freight Corridors) that are operational, plan is to have 6 more DFCs. Wagon manufacturers who are their clients are setting up new facilities which means greater demand.
Recently the wagon industry took a hit. The wagon industry slowdown seems to be stemming from the wheelset issue. India depends extensively on imported wheelsets from China and Europe. This proved to be a bottleneck in wagon manufacturing. Two companies Titagarh and Jupiter have JVs in place for the wheelsets which should start reflecting towards the end of FY27 or beginning of FY28. Mr.Lohia says production of companies like Titagarh is coming back to earlier levels.
Indian Railways Manufacturing(PSU):
“While the railways went on manufacturing wagons they did not focus on tracks and they did not have space to store the wagons, so they paused on their wagon orders which is temporary”. They say the orders from railways are increasing, shifting from private players.
Going forward, companies like Adani, Jindal, ACC cement can lease lines and directly place orders for wagons with the private players.
In case of a slowdown in the Wagon industry- The diversification of their offerings from wagons to tracks, bridges and structures, coaches should help in containing any slowdown specific to the wagon industry. Also, the plant and machinery they have, they can manufacture any 100 kg component for any industry they want to cater. They can cater to the track industry, locomotive and also other industries like the automotive industry. Management always has an eye on where the gaps are and how to fill it proactively.
End user sales composition:
Above email was shared by @satishwe
The wagon industry is dominated by private players like Jupiter, Titagarh, Texmaco whereas in the coaches segments there are government units like ICF, RCF, MCF making the coaches. They say, this market is twice of the Wagons private sector. Their sales directly to Indian Railways used to be just Rs.1.83 crores rest was private. During H1FY26 they have done Rs. 13.24 crores of sales directly to Railways. This section has increased because of integration and adding of new parts towards coaches and also towards locomotives.
Though they are diversifying, their current focus is on the private sector as the margins and payment cycles are much better in private.
Manufacturing process:
The majority of current work is the regular casting process. The component’s mould is made in sand and the melted raw material is poured into this mould. After cooling, depending upon the component a fettling and other processes are done to remove any surface and other inconsistencies,improve tensile strength etc. And then it is passed through several testing processes. Here are the different steps:
Neetu Yoshi’s raw material advantage:
In 2020 they were registered with the railways for auctioning of the scrap materials. They used to procure this raw material and supply to many of the component manufacturers. They are doing it to this day where they are picking up lots from railways and using the scrap for their own raw material. This is of the ferro alloy composition of the alloy steel that they need.
Their Manufacturing Facility is strategically located in close proximity to The Carriage & Wagon Workshop(73 kms away) from where they procure high-quality alloy, which minimises their transportation costs and provides logistics advantage and cost benefits resulting in improved operating margins.
They have an advantage of Rs.4 per kilo as compared to competitors.
Funds/Debt:
Debt: Neetu Yoshi Limited secured approximately ₹16.76 crore in secured loans from SIDBI and the Central Bank of India during 2023. Neetu Yoshi achieved a debt-free status as of April 6, 2025 having repaid all outstanding bank borrowings entirely through internal accruals.
Funds: IPO was in July 2025. It was done for the bogie manufacturing facility in Kanpur which got shifted to Haridwar. 77Cr raised in IPO. 3Cr capex of the new plant (originally Kanpur) , 10Cr buildings, 40Cr for plant and machinery rest for general reserve and IPO expenses.
Their goal of going public was not to raise funds for the bogie manufacturing facility but to raise a good chunk of funding later for their ambition of setting up a wagon manufacturing facility 3 years down the lane.
Orderbook: They have got more than 140 crore of orders as of Nov 2025. Procurement is online through the portal IREPS, they can submit their tender and bid from any zone. UVAM/IREPS - RDSO approval. IREPS for order ins and scrap tendering. https://www.ireps.gov.in/
Facility or Infrastructure:
The original decision was to have a new manufacturing facility in Kanpur for production of complete Bogie and coupler. 50Cr from the IPO funds would go to this, they bought land in Kanpur but later went with Haridwar where their current facility exists.
Benefits of shifting from Kanpur to back to Haridwar:
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There is a new RDSO office in Delhi, Delhi being close to Haridwar saves time on RDSO inspection as bogies have a stagewise inspection. Land is much bigger in size compared to the land in Kanpur.
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One of the main components of the operational cost is electricity, it is cheaper in Uttarakhand compared to what the peers are paying.
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The logistics cost, the bogie components would have moved from this plant to Kanpur and then to their plants. Having a plant in Haridwar helped save on that logistic cost.
Existing facility: Existing plant in Bhagwanpur (Haridwar), area is around 7100 sq metre, has undergone capacity expansion from 4,493 MTPA in FY24 to 8,087 MTPA as of July 2024. Utilization is 80%. Precision engineering parts of the wagon, locomotive, track plus the bridge and structure up to 100 kgs can be manufactured here. The cost of a bogie is currently 3.5 - 4 lakh rupees, out of which the bought out components cost 1.5 lakh rupees which is being done in the current plant, rest will be done in the new bogie manufacturing plant.
Moulding: The molding capacity stands at 8,000 metric tons per annum and the melting is about 9,000. They have added one more moulding line to this facility which is a high pressure molding line. They have done trials, it is still WIP. It will double the capacity of moulding to 16K
Melting: With increased molding capacity melting will become a bottleneck(9K), currently there are 3 furnaces but only one can be used at a time, they will put up an additional transformer and increase the load so 2 furnaces can be used simultaneously and hence increasing the melting capacity.
New Bogie Facility:
New land for bogie manufacturing is 6 km from their existing facility, was acquired in June 2025. This facility should have been operational by April 2026 but going by the plant visit notes by @sumit680 it may get delayed by a month or two. This is a total of 11,000 square metre. This facility will be able to manufacture 500 bogies per month and each bogie costs around 3.5 - 4 lakh rupees. At 100% capacity utilization this should bring them around 240 Cr revenue. For FY27 the utilization may reach 50-60%.
This plant will be 1200 metric tons per month. Components like side frame and bolster of the bogie which are 400 and 800 kgs cannot be manufactured in the existing plant, components like these will be done here.
Plant and machinery for the new facility was ordered when the IPO funds were received. They have added a few more products into the new plant which are related to track and the coach segments. The bigger components related to be it coach, be it locomotive or be it wagon will be done in the new plant.
Fabrication facility(Tracks, Bridges&Structures etc): This is the newly acquired land adjacent to the current facility. In July 2025 they completed construction of 3000 sq metres of shed and a sale for another 2500 sq metres has been concluded. Components up to 1.5 tons can be fabricated here. Only testing is common with the existing facility. Putting together this fabrication facility and the existing casting facility it is totally 12K square metre in one place.
They are looking for a third piece of land near the railway line for the 2030 goal of wagon manufacturing.
Numbers(Revenue, margins etc):
H1FY26:
Revenue - Rs. 45.89 crores, which is a 30% growth YoY
EBITDA - Rs. 15.93 crores which is a 38.31% growth YoY, EBITDA margin at 34.72%.
Net Profit - Rs. 11.54 Cr. which is 45% growth YoY, PAT margin at 25.15%.
They only work on products which can give them a PAT level of 25%. One of the reasons they cite for higher margins are the high precision safety component products which go through 30 different processes, and because of the value addition they are of higher margins. The company strongly believes these margins are sustainable.
Regarding the raw material price volatility affecting the margins, Mr.Himanshu mentions a PVC clause in the railways, the price variation clause, whenever there is a hike in the raw material price you can put that up in the bill. Since the private players are also into the same industry he says they understand the hike in prices and they let the prices be revised.
They also cite their box size(size of the moulding box and the number of components that can be made from it) and yield(amount of metal poured vs the metal casting made) are way better than their competitors. They put their yield at 95% while their competitor’s at 65%. They claim to be able to maintain this in the new bogie facility as well.
WC cycle as per management - 30 days of material processing, 30-35 days of transit and bill processing. Around 75 days of WC cycle. Currently in screener it is at 55 for March 2025. Order completion cycle is 30 days. Payment cycle for private - 15 days. Railways - 7 days to 45 days
50Cr is the capex for the new Bogie plant and sometime in FY28 they will be at 100% utilization. Taking just this plant into consideration, with 240Cr revenue and a PAT of 60Cr, the asset turnover will be 4.8x and their RoA will be 120%. That’s too good to be true!
The company does not have a strong moat per se, below factors are working in favour of the company:
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Income tax benefit, central govt scheme of 115BAB 7.5%. 2019- 2024. 17.5%(15% + 2.5% cess) as against 25% paid by competitors, there is no sunset and this is lifelong.
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Their raw material procurement cycle through railways scrap auctions gives a benefit of 4Rs per kg.
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By having a plant in Haridwar they have an electricity cost advantage.
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Late mover advantage of better CNC machines and high pressure moulding lines, better furnaces help save on melting costs, advantage of having higher automation reducing labour costs.
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Last but not the least, is Mr.KS Chandra who had a stint with the railways is the guiding force for approvals and the components to work on.
Guidance and targets:
Net profit margin targeted was 25%, achieved 25.15% in H1FY26.
Revenue target for entire FY26 is 110Cr.
The 110Cr projection does not include bridges and structures if it happens that is additional.
The components of coaches are more expensive, higher margins, because of the criticality of the product.(it’s people vs goods). ICF is stricter than RDSO, they have received approvals from ICF for a few coach components. Lesser competition in coaches.
FY27 guidance:
220 Crs is something they are confident about achieving for FY27.
The Haridwar plant will be able to generate 240Cr of revenue once it’s operational in April 2026, utilization levels will be initially about 50-60% in FY27.
This projection does not include any revenue from bridges and structures, springs for which they have already applied for approvals. If this materializes, revenue will be upwards of 220Cr.
They are targeting around 380Cr for FY28 and for years after that their plan is for complete wagon manufacturing which they claim could be a complete changer in terms of revenue.
Projected PAT margins for both the years is 25%.
FY26 PAT - 27.5Cr
FY27 PAT - 55Cr
FY28 PAT - 95Cr
1 bogie is approx 4 lakh, they will be able to make 500 in a month(at 100%capacity). In Fy27 the plant will be at 60% capacity, in FY 28 it will move to 100% capacity.
Risks / Red flags:
Any failure of their products and bad quality can lead to blacklisting.
Cash conversion cycle has increased. As their exposure to railways increases so ill the WC cycle.
Slowdown in Railways expansion by the government due to budget constraints.
Supply glut leading to margin compression. When margins are subsidized they say they just move to other products which have better margins. I wonder if it is easier said than done.
Their new facility not coming on time will have a direct impact on guidance.
They have unrelated businesses like Neetu Delights as their subsidiary and there are questionable Related Party Transactions.
Their DRHP is anaemic on industry info and some of the other parts look like it is hurriedly done.
Their projections assume everything will go as planned and it seems stretched. For ex: their projection for Bogies is at 4 lakh rupees per bogie looks like the upper ceiling price and no room for any reduction there.
They mention Atul engineering, frontier alloy steels, NKRIL industries, Anjani rails, ombesco and frontier alloy steels as their direct competition. None of them are listed and we do not know about any capex they might be doing to gauge the demand supply scenario.
Another casting company in a similar mould, no pun intended, is Kalyani cast-tech. Mr.KS Chandra is also part of the management of that company. This is primarily catering to the railways again. They are also used to giving glorious revenue and PAT targets. A company making 161 Cr TTM revenue is guiding for 1013 Cr revenue by FY31. Their operating margins were at 19% for March 2023(IPO in Nov 23) has now fallen to 12%.
Mr.Yogesh Lohia’s(Himanshu’s father) track record is questionable, his earlier company Jagadamba Liquified steel is approved as a Class ‘A’ foundry by RDSO and listed as active in Zaubacorp but has a CRISIL rating of ‘D Issuer not cooperating’ and Maps shows it as permanently closed.
Disclosure: Recently invested. Thinking of this as a short term investment expecting they will meet their Q4FY26 guidance. Not enough conviction, at this point, on the management for a long term investment.
