Titagarh Rail Systems rides on Vande Bharat, metro for growth push; what else ICICI Securities says

Titagarh Rail Systems Ltd appears positioned to tap a significant growth opportunity in India’s rolling-stock market across both passenger and freight segments, with the passenger mobility business led by Vande Bharat trains and metro coaches expected to drive the near-term story. Over the years, the company has diversified its business model and shifted towards the higher-growth passenger segment, which now accounts for 81% of its current order book, against 10% in FY23.

The growth runway in passenger rolling stock is linked to the government’s plan to operate 800 Vande Bharat train sets by 2030, against 164 as of December 2025, and to scale this further to 4,500 train sets by 2047. India’s metro network is also expected to expand from about 1,100 km at present to around 2,000 km by 2030, with proposed routes for another 1,000 km. Titagarh Rail is already executing a healthy order book as of FY26 to manufacture 519 metro cars and 1,280 Vande Bharat coaches in consortium with BHEL.

The company is also working to build in-house capability in manufacturing propulsion systems over the next few years. This is seen as strengthening its position in the passenger segment and could support faster growth along with potential margin expansion.

Titagarh Rail Systems is positioned across passenger rolling stock, including metro coaches and Vande Bharat trains, and freight rolling stock, including wagons. While the freight segment order book has remained modest and current orders could be executed within FY27, the longer-term outlook remains tied to Indian Railways’ push to raise rail freight’s modal share to 45% from about 22% in 2025 and to handle 3.3 billion tonne of cargo by 2030.

Even with muted assumptions for freight segment revenues, execution momentum in the passenger segment could keep revenue and profit growth in good stride. The medium- to long-term freight outlook is supported by the government’s target of moving 3.3 billion tonne of rail cargo by 2030, against 1.67 billion tonne in FY26, along with the possibility of future tender rollouts by Indian Railways.

The balance sheet remains a supporting factor, with net debt to EBITDA of about 0.5 times and return on equity of around 10% to 13%. On estimates for FY26 to FY29, profit after tax is projected to grow at a compound annual growth rate of 52%.

Based on the long-term potential of the passenger rolling-stock business, Titagarh Rail is valued at 35 times H1FY29E earnings per share, with a 12-month target price of Rs 966 and coverage initiated at ADD. The broader view remains that strong passenger-segment execution, together with a diversified business model and a healthy balance sheet, could help offset the slower pace in freight orders.