Jupiter Wagons vs Titagarh Rail: Which railway stock to buy? 12-month targets

Antique Stock Broking prefers Titagarh Rail Systems Ltd over Jupiter Wagons Ltd, maintaining a 'Buy' rating on the former wagon maker, driven by accelerating momentum in its Passenger Rail Systems (PRS) division, while retaining a 'Hold' rating on the latter due to near-term execution challenges. Antique's target on Jupiter Wagons hinted at 6 per cent potential downside from Tuesday's intraday price of Rs 279.45. Its target on Titagarh Rail, on the other had, suggesed 19 per cent potential upside. 

Titagarh Rail Systems Ltd share price target
Antique said Titagarh Rail Systems delivered an in-line March quarter performance, with revenue coming broadly in line with its expectations. PRS division delivered a strong performance (up 96 per cent YoY) supported by the dispatch of metro coaches, while Freight Rail Systems (FRS) delivered de-growth of 23 per cent YoY, primarily due to delivery challenges on the wheelset side. The railway-linked company reported a 40 basis points expansion in Ebitda margin at 11.1 per cent,  broadly in line with Antique's estimate of estimate of 11.3 per cent. 

"Order book remains robust supported by freight wagons, Vande Bharat, Ahmedabad Metro, Mumbai Metro & Surat Metro orders, providing healthy revenue visibility. Management expects execution to gain momentum as wheelset delivery from Indian Railways normalises. The medium to long term outlook remains strong, supported by opportunities in metro, Vande Bharat, and the freight wagon space," Antique said, 

This brokearge retained its positive stance on the Titagarh Rail stock with a 'Buy' rating and an unchanged target of Rs 985, valuing it at 24 times its FY28E EPS.

Jupiter Wagons Ltd share price target
In the case of Jupiter Wagons, the wagon maker reported a weak set of operational performance in the March quarter, with sales falling 25 per cent YoY, on account of lower wagon volumes leading to margins declining 390 basis points YoY to 10.7 per cent. This was against Antique's estimate of 12.5 per cent. 
Due to this, profit fell 66 per cent YoY. Antique said Jupiter Wagons is a top-tier player in the field of mobility solutions, particularly in the railway domain with strong capabilities across its key business verticals and a favourable long-term industry outlook. 

"We expect revenue/PAT CAGR of 26 per cent/ 51 per cent over FY26-28E. However, factoring in near term supply challenges, we trim our FY27E/ 28E EPS estimates by 3 per cent/3 per cent respectively. Retain HOLD rating on JWL with revised target of Rs 264 (earlier Rs 272), valuing the stock on a P/E multiple of 26x its FY28E EPS," Antique said.