Rs 98 to Rs 529 in a year: Can this multibagger railway stock cross Rs 680 mark?

Shares of multibagger Titagarh Rail Systems Ltd hit their all-time high today. The railway stock, which hit a 52-week low of Rs 98.30 on June 28, 2022 hit a record high of Rs 529.40 in today’s trading session. This implies the stock surged over 439% in a year. In the last three years too, the stock has rallied a strong 1338%. The railway stock, which closed at Rs 35.04 on June 26, 2020 rose to a high of Rs 529.40 on the BSE today. In comparison, Sensex has risen 81.71 per cent in three years. In the current session, Titagarh Rail stock zoomed 4.67% to an all-time high on BSE. Earlier, the stock opened higher at Rs 520.85 on BSE.  

In terms of technicals, the relative strength index (RSI) of the stock stands at 79.6, signaling it's trading in the overbought zone. Titagarh Rail Systems shares have a beta of 0.9, indicating low volatility in a year. Titagarh Rail Systems shares stand higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.   

The share has climbed 402% in a year and 124% in 2023. Total 1.88 lakh shares of the firm changed hands amounting to a turnover of Rs 9.66 crore in today’s session. Market cap of the firm rose to Rs 6098 crore.   

Arihant Capital Markets Ltd expects the stock to rise to Rs 686 in a year. 

The brokerage said, “Titagarh Rail Systems has a strong order book of Rs 275.5 bn (9.9x of FY23 revenue), well positioned to benefit from freight wagons, Vandhe Bharat Trains, Metros, and global wagon tenders, Italy's business net profitability is expected in FY24, Capacity expansion, backward integration, New orders for Vandhe Bharat Trains and Wheelsets will drive business growth going forward. Our initial price objective of Rs 495 has been achieved. However, in a Bull Case Scenario, We maintain our “BUY” rating and valued the stock at 20x of its FY25E EPS, and arrived at a price objective of INR 686, an upside of 35.8%* 

Antique Stock Broking has initiated coverage on the stock with a “buy” call. The brokerage has set a target price of Rs 694 based on 20 times its FY25 earnings, implying a 54 percent upside.   

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, it said  

“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 is aiming 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 said.  

Nine promoters held 47.83 per cent stake in the firm and 107836 public shareholders owned 52.17 per cent or 6.23 crore shares for the quarter ended March 2023. Of these, 1.04 lakh public shareholders held 2.77 crore shares or 23.17% stake with capital up to Rs 2 lakh. Only 16 shareholders with 5.07% stake held capital above Rs 2 lakh for the quarter ended March 2023.   

In the March quarter of last fiscal, Titagarh Rail Systems posted net profit of Rs 48.24 crore against Rs 24.95 crore loss during the quarter ended March 2022. However, sales zoomed 102% to Rs  974.22 crore in Q4 against Rs 480.94 crore during the quarter ended December 2022.     

For the fiscal ended March 2023, the firm reported a profit of Rs 130.20 crore against a loss of Rs 0.33 crore in the year ago period. Sales zoomed 44% to Rs 2779.59 crore in the last fiscal against Rs 1930.79 crore for the fiscal ended March 2022.   

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.    

 

Also read: Brightcom Group shares snap 4-day losing run, locked in 5% upper circuit; here's what tech charts hint

Also read: Sensex tops 64,000, Nifty scales fresh all-time peak of 19,000: Investor wealth jumps over Rs 1.84L cr; IFB Ind & Adani Ent jump up to 5%