Rs 48 to Rs 758: This railway stock turned into a multibagger in three years; gave up 5-day moving average today

Shares of multibagger Titagarh Rail Systems Ltd have delivered over 1400% returns to investors in the last three years. The stock of railway wagons maker, which closed at Rs 48.45 on August 28, 2020 rose to a high of Rs 758.55 on August 30, 2023, clocking 1465% returns on BSE. An amount of Rs 1 lakh invested in the Titagarh Rail Systems stock three years ago would have turned into Rs 15.62 lakh today. In comparison, Sensex has risen 65.58 per cent during the period.     

The shares of Titagarh Rail Systems touched an all-time high of Rs 827.95, rising on August 25 on BSE. It hit a 52 week low of Rs 136.45 on September 28, 2022. Since then, the stock has recovered 444% from its yearly low.   

In the current session, shares of Titagarh Rail gained 3.79% to hit an intraday high of Rs 758.55 on BSE.  

Total 8110 shares of the firm changed hands amounting to a turnover of Rs 60.38 crore. Market cap of the firm rose to Rs 9479.33 crore.      

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In terms of technicals, the relative strength index (RSI) of the stock stands at 59.9, signaling it's trading neither in the overbought and nor in the oversold zone. Titagarh Rail Systems shares have a beta of 1, indicating average volatility in a year. Titagarh Rail Systems shares are trading higher than the 20 day, 50 day, 100 day and 200 day but lower than the 5 day moving averages.      

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In the last one year, the Titagarh Rail Systems stock has surged 337.29%.  

Market expert Ravi Singh said, "After the Union cabinet approved rail expansion projects worth Rs 32,000 crore, most of the rail stocks are on rise. Titagarh, which deals in manufacturing of railway coaches, wagons will also benefit with this package. On the technical setup, the stock is showing strength on daily and weekly basis and the momentum indicators suggesting a strong move ahead for the target of Rs 850 in the near term after a brief period of profit booking on the counter."  

Gaurav Bissa, VP, InCred Equities said, "Titagarh Rail Systems had a dream run since the last couple of years during which the stock has more than tripled. The stock has achieved multiyear breakout targets which indicates one should book profits at the current levels. RSI is also seen reversing from extreme overbought zone on the weekly charts implying the upside may see some halt in the coming weeks."

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Abhijeet from Tips2Trades said, "Titagarh Rail Systems is bearish on the Daily charts with next resistances at Rs 785 & Rs 823. Investors should book profits at current levels as a  daily close below the support of Rs 722 could lead to a target of Rs 600 in the near term."

 Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has been on a good run with a steady and gradual rise. It has now given a short correction from Rs 830 levels to retest the breakout level of Rs 690. There is strong support around Rs 690 levels, and with support at Rs 690, one can buy for an upside target of Rs 830–850 levels."

Antique Stock Broking in a report said, “Titagarh Rail Systems, a leader in the wagon manufacturing space, now is also among India's few integrated manufacturers of passenger rail systems, the brokerage firm said. The company has created a manufacturing setup which is difficult to replicate and has the capacity to grow its turnover to over Rs 9,000-10,000 crore over the next five years.”  

“We expect TRSL (Titagarh Rail Systems) to post earnings CAGR (compounded annual growth rate) of 53 percent over FY23-26, and generate an average RoE (Return on Equity) of over 25 percent,” it said. 

Titagarh Rail Systems plans to invest Rs 600 crore over the next three years and recently proposed raising of Rs 289 crore by selling shares to a large investor. This, along with strong cash flow expected in the future, would help the wagon maker meet its growth goals, the brokerage added.     

Nine promoters held 44.97 per cent stake in the firm and 141553 public shareholders owned 55.03 per cent or 6.99 crore shares as on July 7, 2023. Of these, 1.37 lakh resident individuals held 2.68 crore shares or 21.14% stake with capital up to Rs 2 lakh. Only 11 resident individuals with 3.71% stake held capital above Rs 2 lakh as on July 7, 2023.     

 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.