Titagarh Rail soars 13% to hit new peak in weak market; up 81% in 11 weeks

A combined 7.9 million equity shares representing 5.9 per cent of total equity of the company have changed hands on the NSE and BSE till 02:49 PM.

Stock price of Titagarh Rail Systems (TRSL) hit a new peak of Rs 1,413.45, surging nearly 13 per cent on the BSE in Wednesday’s intra-day trade amid heavy volumes in otherwise a weak market. Since March 13, in past 11 weeks, the stock of railway wagons company has zoomed 81 per cent.

At 02:49 pm, TRSL was trading 11 per cent higher at Rs 1,396, as compared to 0.77 per cent decline in the S&P BSE Sensex. The average trading volume more than doubled on May 29, with a combined 7.9 million equity shares, representing 5.9 per cent of total equity of the company, changing hands on the NSE and BSE.

Titagarh Rail Systems offers mobility solution with its prominent presence in both the Passenger and Freight Rail Systems including railway wagons, components, passenger coaches (EMU/MEMU) and Metro Coaches. Titagarh Rail Systems is the largest private sector manufacturer of railway wagons and an established player in passenger coaches.

Titagarh Rail Systems has been awarded the largest-ever order for wagons by Indian Railways, in addition to the orders for manufacture and supply of Metro Trains for Pune Metro and Surat Metro projects. The company is also the co-recipient of prestigious orders for Vande Bharat trains & Forged Wheels.

As on March 31, 2024, the total order book of TRSL stood at Rs 14,750 crore, provides medium-to-long term revenue visibility based on execution timelines. In March, TRSL had accepted the offer from the Railway Board for Manufacture and supply of 4,463 BOSM Wagons for a contract value of Rs 1,909 crore.

Order book of Titagarh Rail Systems

The management believes that the passenger railway systems will start picking up from Q1 and Q2 of this financial year, primarily from Q2 because that's the time when Surat and Ahmedabad production is also likely to begin.

“With orders coming in from the passenger rolling stock segment, the order book composition has also diversified from Freight:Passenger ratio of 89:11 (as on March 31, 2022) to 51:49 (as on September 30, 2023). However, the timelines of passenger rolling stock segment orders vary with around first 18 months (from the receipt of the Letter of Acceptance (LOA)) of the development stage and hence any meaningful contribution to revenue and profitability will come at the end of fiscal 2025. The successful buildup of prototypes under development stage and execution as per contract timelines along with expected margins would remain a key monitorable,” CRISIL Ratings said in rationale.

CRISIL Ratings believes TRSL’s operating performance will benefit from existing order book and sustenance of healthy financial risk profile over the medium term.

The ratings continue to factor in the established market position of TRSL in the wagon manufacturing industry, and benefits derived from diversification into passenger rolling stock segment (Vande Bharat and various metro orders), along with an improved financial risk profile. These strengths are partially offset by working capital-intensive operations, significant dependence on Indian Railways for orders and exposure to volatility in raw material prices, the rating agency said.