Railway stock: Texmaco Rail shares up 18% in 5 days; worth a buy after Q4 results?

Shares of Texmaco Rail & Engineering Ltd have climbed 18 per cent in the past five sessions. Yet the railway stock is down 17 per cent in 2025 so far. Brokerages noted that the wagon maker managed to clock 18 per cent year-on-year (YoY) jump in Q4 consolidated revenue despite continued wheelset availability issues. One-off provisions led to profit falling 12 per cent YoY, they said. 

For the quarter, Texmaco Rail dispatched 2,597 wagons, taking its FY25 wagon dispatches to 10,612 at the consolidated level. Texmaco Rail ended the year with an order book of Rs 7,000 crore, which was 1.4 times book-to-bill ratio.  

Nuvama Institutional Equities said a dwindling order book in the wake of the nil hike in outlay for railways compelled it to slash the P/E multiple for the stock to 30 times from 35 times. But it maintained ‘Buy’ on the stock with a revised target price of Rs 211 from Rs 214 earlier.

If Indian Railways' plan to procure 38,000 wagons in FY26E materialises, it shall be a significant positive for the company, Nuvama said.

The brokerage said Texmaco ended FY25 with a consolidated order book of Rs 7,000 crore, which was net of inter-segmental orders for the foundry division. Muted wagon ordering from Indian Railways (9,400 wagons ordered in FY25 versus 24,900 wagons in FY24) has led to the wagon order book falling for wagon manufacturers, Nuvama said. 

"To enhance its offerings to the global markets, Texmaco entered into two partnerships in Q4FY25. The first with Nevomo (a European firm) shall focus on high-speed rail and predictive diagnostics while the second one with Trinity Rail (a leading US-based rolling stock manufacturer) would focus on expanding opportunities in the rolling stock and component manufacturing space across North America and other international markets," the brokerage said.

SBI Securities on May 14 suggested a 6-12 month target price of Rs 179 on the Texmaco Rail stock, saying the stock was trading at FY26 and FY27 Bloomberg consensus P/E multiple of 18 times and 14 times, respectively.