Shares of multibagger Titagarh Rail Systems Ltd have recovered 430% from their 52-week low in a year. Titagarh Rail Systems stock, which hit a 52-week low of Rs 160.05 on November 14 last year hit a high of Rs 849 intraday in the current session. Apart from the rally from 52-week low, the stock has clocked 384% returns in a year and zoomed 831% in two years. The stock has clocked positive returns in all time periods up to 10 years. Shares of Titagarh Rail Systems gained 3.74% to Rs 849.05 today against the previous close of Rs 818.40 on BSE. Total 1.44 lakh shares of the firm changed hands amounting to a turnover of Rs 12.06 crore. Market cap of the firm rose to Rs 10,719 crore. Titagarh Rail stock hit a 52-week high of Rs 867 on October 18, 2023.
It has a one-year beta of 0.6, indicating very low volatility during the period.
In terms of technicals, the relative strength index (RSI) of the stock stands at 60.7, signaling it's trading neither in the overbought nor in the oversold zone. Titagarh Rail Systems shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Here’s a look at the outlook and latest target prices for the railway stock.
Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher said, "The stock after the decent bull run has been moving within a range for quite some time with support maintained near Rs 740 zone and upside was capped near Rs 868 levels which needs to be breached for further fresh upside move. The bias has been maintained strong with RSI also well placed and has immense upside potential in the coming days."
SBI Securities has assigned a target of Rs 988 for Titagarh Rail shares.
“Titagarh Rail maintains a substantial order book worth Rs 28,212 crore, with both Freight Rolling Stocks and Passenger Rolling Stocks making significant contributions. With a planned capital expenditure (capex) of Rs 600 – Rs 700 crore over the next three years, the stock is well-positioned for growth,” said the brokerage.
Nuvama Institutional Equities has raised its share price target to Rs 949 from Rs 776 earlier.
"Execution of the wagon order from the Indian Railways is progressing well; the company achieved highest-ever dispatch of 759 wagons in September. Titagarh Rail is benefiting from surging railway capex. We are raising the target P/E to 33 times from 30 times and FY24E and 25 EPS estimates by 5 per cent and 4 per cent, respectively," Nuvama said.
Nuvama said the inorganic route is propelling the growth trajectory for Titagarh Rail Systems and that the railways linked company is well entrenched in the wagon segment, having beefed up the business in its near two decade journey.
HSBC Global Research has raised its target price of Titagarh Rail Systems to Rs 970 from Rs 900 as the order backlog shows strong visibility to the growth outlook. It has retained its buy rating for the stock.
"Q2 results improve our confidence in Titagarh’s execution capabilities," the brokerage said.
As the largest wagon manufacturer and an emerging leader in passenger coaches, Titagarh Rail is benefiting from the government’s thrust to put more freight onto rails as well as the modernisation of passenger rail transportation, said HSBC.
Revenue climbed 54% year-on-year, led by 70% growth in the freight rail systems segment, while passenger rail systems growth was soft at plus 7%, HSBC said.
“Revenue climbed 3% quarter-on-quarter which was in line with our expectation. Profitability was impressive, with the Ebitda margin coming in at 13.5% (up 320 basis points y-o-y, 60 basis points q-o-q)," the note said. Although strong profitability was expected, given high wagon shipments from the private market, it said.
"We maintain our FY24-26 revenue forecasts but raise FY24e EPS by 13% and FY25e-26e EPS by 4-6%. With a significant jump in profit in FY25e (75%), we expect profit to grow at a 30% CAGR over the next two years, with an average ROIC of 23% over FY24e-26e," HSBC said.
Abhijeet from Tips2trades said, "Titagarh Rail is sideways on the Daily charts with strong resistance at Rs 867. A daily close above this resistance could lead to target of Rs 948 in the near term. Support will be at Rs 786."
Titagarh Rail Systems reported a 46.5% increase in net profit to Rs 70.6 crore in Q2 against a net profit of Rs 48.2 crore in the September 2022 quarter. Total revenue rose 54.1% to Rs 935.5 crore in Q2 against Rs 607.1 crore in the corresponding period of the preceding fiscal. Earnings per share climbed to Rs 5.56 in the September 2023 quarter against Rs 3 in the September 2022 quarter.
Profit before tax zoomed 112% to Rs 94.39 crore in the last quarter against Rs 44.45 crore in the September 2022 quarter.
About the Company
Titagarh Rail Systems is engaged in the manufacturing and selling of freight wagons, passenger coaches, metro trains, train electricals, steel castings, specialised equipment and bridges, and ships. The company operates through three segments: freight rolling stock, passenger rolling stock, and shipbuilding, bridges & defence.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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