Braithwaite & Co faces profitability challenges in FY24 amid leadership transition

Braithwaite & Co, the central public sector undertaking famed for constructing the iconic Howrah Bridge, is grappling with challenges as it navigates through a leadership transition, impacting its profitability for the fiscal year 2023-24.

The net profit, which witnessed a steady climb from Rs 2.6 crore in 2017-18 to nearly Rs 50 crore in 2022-23, is anticipated to experience a dip in the current fiscal year. Until December 2023, the profit stood at Rs 17.35 crore, making it unlikely to surpass the previous year's figure in the last quarter of the fiscal year.

Sources revealed that the order book had shrunk from Rs 2,346 crore in March 2023 to Rs 1,473 crore, contributing to the profitability challenges. The slowdown is attributed to the departure of Chairman and Managing Director Yatish Kumar in May 2023, following a successful five-year stint.

Sales experienced a dip between June and August 2023, but under Kumar's leadership, they recovered significantly, reaching Rs 140.63 crore in December. An Indian Institute of Management Indore (IIM-Indore) case study acknowledged Kumar's role in Braithwaite's turnaround, hailing it as a strategic revival and turnaround success story.

Despite the temporary dip in performance during Kumar's return to Railways duties, he expressed confidence in surpassing targets and regaining momentum. The leadership transition is a focal point in MBA courses on strategic revival, with institutions like IIM Indore and Bennett University incorporating the case study.

Braithwaite, under Kumar's leadership, experienced remarkable growth, with sales soaring nearly 700 per cent since 2017-18, and the company achieving debt-free status. The net worth also saw a significant increase from Rs 6 crore in FY 2018 to Rs 200 crore in FY 2023.

The success of Braithwaite is attributed to diversification into new service-oriented verticals, reducing dependence on low-margin businesses like wagon making. Plans included further diversification into civil construction, bridge cranes, operation and maintenance activities, container manufacturing, solar PV plants, and railway station construction.

While facing profitability challenges in the short term, Braithwaite is working towards appointing a full-time CMD soon, with Muhammed Asad Alam, Chief Rolling Stock Engineer, SER, identified as a potential candidate for the position. The company's long-term vision aims to become a Rs 2,500 crore listed CPSU by 2025-26.