Multibagger stock: Titagarh Rail shares jump 5% on Rs 857 crore order win, extend YTD gains to 130%

Shares of Titagarh Rail Systems Ltd (erstwhile Titagarh Wagons) hit a fresh high in Wednesday’s trade after the company bagged Rs 857 crore worth orders from Gujarat Metro Rail Corporation for designing, manufacturing, supplying, testing, commissioning and training of 72 Standard Gauge Cars for Surat Metro Rail Phase-I Project I. The order for Surat metro coaches would start 76 weeks after signing the contract and is scheduled to be completed in 132 weeks thereafter, Titagarh Rail Systems old stock exchanges.

Following the development, the multibagger stock rose 4.67 per cent to hit a fresh high of Rs 529.20 on BSE. Titagarh Rail shares are now up 130 per cent year-to-date.

In a filing to BSE, the company said: "Pursuant to Regulation 30 read with Schedule III Part A of the Sebi Listing Regulations, we wish to inform you that the company has received letter of acceptance (LOA) dated 27th June, 2023 from the Gujarat Metro Rail Corporation (GMRC) Limited w.r.t. design, manufacture, supply, testing,

commissioning and training of 72 nos. of standard gauge cars for Surat Metro Rail Phase-I Project I”. The order value is about Rs 857 crore and execution would start 76 weeks after signing the contract and is scheduled to be completed in 132 weeks thereafter.

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Titagarh Rail Systems is an integrated manufacturer of passenger rolling stock, with the capability to produce coachs, propulsion systems, and bogies at its modern Kolkata facility. The company is executing orders to manufacture 204 coaches for Bengaluru Metro and 102 coaches for Pune Metro (aluminium body).

Antique Stock Boking earlier this month week initiated a coverage on the stock with a 'Buy' rating, as it feels "a jewel in the making" and could be a long-term wealth creation opportunity. The brokerage has set a share price target of Rs 694 on the stock, suggesting 63 per cent potential turns. In the initiation report on the stock, Antique Stock Broking said India's largest wagon manufacturer has transformed itself into a complete railway transportation company, with a successful entry into the passenger transport sector.

"While Titagarh Rail Systems is India's undisputed leader in the wagon manufacturing space, now it is also among India's very few integrated manufacturers of passenger rail systems. We believe that the company has created a manufacturing set-up, which is difficult to replicate, and has the capacity to grow its turnover to over Rs 9,000-1,0000 crore over the next five years," it said.

Antique Stock Broking said Titagarh Rail Systems may post earnings growth of 53 per cent compounded annually over FY23-26E, and generate an average return on equity (RoE) of 25 per cent. The Titagarh Rail Systems stock has meaningfully appreciated in the past year, led by a nearly doubling of profit in FY23.

 

Also, Antique Stock Broking noted that the company is increasing its wagon manufacturing capacity from 8,400 wagons per year, to 12,000 wagons per year in FY24. The company had got a large order to supply 24,177 wagons in May (valued at Rs 7800 crore) to be supplied over three years that, Antique said, will ensure strong growth in the segment over FY23-25.

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