The Railway Wagons sector in India has witnessed remarkable growth, with annual production soaring from an average of 13,262 units (2004–2014) to a record 41,929 wagons in FY 2024 – 25, a threefold increase.
This surge supports industries like coal, cement, and steel, enhancing freight efficiency and reducing logistics bottlenecks, with total production exceeding 102,000 wagons in the last three years.
With a market capitalization of Rs 12,606.14 crore, the shares of Titagarh Rail Systems Ltd closed at Rs 936.05 per share, decreased around 0.30 percent as compared to the previous closing price of Rs 938.85 apiece.
Titagarh Rail Systems Ltd’s stock has dropped 43% over the past year, raising investor concerns. In Q4 FY25, the company reported a 5% YoY revenue decline and a 19% fall in PAT. Additionally, EBITDA margins shrank from 11 percent in Q4FY24 to 9 percent, reflecting operational challenges and weakening financial performance.
Moreover, Titagarh Rail’s order book slipped slightly to ₹24,526 crore in Q4 FY25 from ₹25,333 crore in Q3, reflecting a marginal dip in fresh orders. The quarter-on-quarter decline could hint at slowing momentum, leaving investors cautiously optimistic yet slightly concerned about future growth visibility.
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Further, Titagarh faces notable challenges, including a wheelset shortage impacting Q3/Q4 FY25 and Q1 FY26, though relief is expected by June. Metro project delays and private sector wagon hesitancy add to uncertainty. Meanwhile, the Titagarh Firema audit issue lingers, though potential losses seem largely accounted for. Caution remains warranted.
On February 27, Morgan Stanley reaffirmed its “overweight” stance on the stock but slashed its target price to Rs 1,090 per share from Rs 1,300 apiece. Despite the revision, this still has a potential upside of 30 percent from current levels.
Morgan Stanley flags concerns over limited freight wheelset supply from Indian Railways, which could drag Titagarh’s earnings. Adding to the pressure, the Vande Bharat project execution is delayed by nine months due to design tweaks. While long-term prospects remain, these near-term hiccups cloud revenue visibility, leaving investors uncertain and cautious.
Moreover, Titagarh Rail’s market share in wagon manufacturing appears to have narrowed, from 25–30% in Q3 FY25 to around 25% in Q4 FY25. While still significant, the slight dip raises questions. Either way, the mixed signals leave investors slightly puzzled.
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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