The shares of the leading manufacturer gained up to 8 percent after Morgan Stanly, an FII bought 7.63 lakh equity shares in the company via NSE Bulk deal.
With a market capitalization of Rs 15,908.34 crore, the shares of Titagarh Rail Systems Ltd were trading at Rs 1,182.20 per share, increasing around 4.39 percent as compared to the previous closing price of Rs 1,132.45 per share.
Reason for rise:-
Today, the company shares have seen positive movement after Morgan Stanley Asia Singapore Pte, an FII bought a 7.63 lakh equity share, representing a 0.57% stake in the company at an average price of Rs 1,120 per share, amounting to Rs 85.5 crore; however, Smallcap World Fund Inc sold a 0.59% stake in the company at an average price of Rs 1,120.12 per share, valued at Rs 88.6 crore.
Moreover, Smallcap World Fund Inc., FII holds 36,87,257 equity shares which is equivalent to 2.74 percent in the company, as of June 2024.
Financial Analysis:-
Looking forward to the company’s financial condition, Titagrah Rail System Ltd.’s revenue fell by 1 percent from Rs 911 Crore in Q4FY23 to 903 Crore in Q4FY24. During the same period, net profits zoomed by 8 percent from Rs 62 crore to Rs 67 crore.
Order Book:-
As of May 2024, the company had a consolidated order book of 27,343 crores. 48% of the order the book consisted of freight rolling stocks and 51% of it came from passenger rolling stocks.
Production Targets:-
The company aims to produce 12,000 freight wagons annually, translating to 950 to 1,000 wagons per month. Currently, the average production for the quarter is approximately 700 wagons, with expectations for growth in output as production capabilities are enhanced.
Future initiative:-
The company anticipates significant orders for Surat and Ahmedabad metros, with production set to begin in Q4 FY ’25. Additionally, it has exported its first traction converters to Europe, highlighting the potential for expanding its presence in the international market through technological advancements and export initiatives.
Margin guidance:-
The company projects sustainable margins of approximately 12% to 12.5% for its freight segment. For passenger rail systems, margins are expected to be 10-11% without propulsion
technology, with potential increases to 14-15% upon integrating propulsion, enhancing overall profitability in both segments.
Capex plan:-
The company projects capital expenditure (Capex) of Rs 700 to 1,000 crores for FY ’25, primarily allocated for production line setups for Vande Bharat and other propulsion technologies. This investment is expected to be utilized within the current fiscal year and the early part of FY ’26.
Market leader position:-
The company has a market leader position with a 30 percent market share in freight wagons. And Largest wagon manufacturer in India.
Joint Venture:-
The company has formed a joint venture with Ramkrishna Forgings for wheelset production, and the project is on track, featuring a guaranteed offtake from the railways. This collaboration aims to enhance production capabilities and strengthen the company’s position in the railway infrastructure sector.
Company profile:-
Titagarh Rail Systems Limited, formerly Titagarh Wagons Limited, is a supplier of passenger rolling stock including metro coaches. The Company’s product range includes electric propulsion equipment such as traction motors and vehicle control systems.
Written by:- Abhishek Singh
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