On Wednesday, the shares of India’s largest wagon manufacturer and market leader with 30-35 percent market share rose 9.5 percent to a 52-week high of Rs 594.95 per share after brokerage recommended ‘buy’ rating.
Titagarh Wagons Ltd manufactures railway wagons, naval ships for the armed services,mining and defence equipment,,The company serves domestic and international clients.
Titagarh Wagons Ltd shares were trading at Rs 584.55 on the NSE at 12:40 p.m., up 8.14 from the previous close.
The company’s share has delivered multibagger returns of 354 percent in a year and 146 percent in six months. If a shareholder had invested Rs 1 lakh in the company that would be worth Rs 4.5 lakhs in a year and Rs 2.46 lakhs in six months.
Company’s revenue climbed by 44 percent year on year, rising from Rs 1,930 crore in FY 21-22 to Rs 2,779 crore in FY 22-23. During the same time period, net profit increased by 22900 percent, from Rs 0.6 crore to Rs 138 crore.
Based on a favourable outlook for the company, HSBC has given a buy rating and a target price of Rs 730, representing a 35% increase from Tuesday’s closing price.
The rationale behind providing such a recommendation is
- Brokerage considers India’s plans to increase freight capacity on its trains to be an attractive potential for the Titagarh and other orders from the metro sector.
- Brokerage anticipates that Titagarh will generate revenue CAGR of close to 30% in FY 23–26.
- Based on a more diversified company, HSBC anticipates Titagarh’s net profit to increase by 2.5 times between the financial years 2023 to 2026, with an average RoE of 18%.
Written by Omkar Chitnis
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