Titagarh Wagons rallies 8%; board to meet Saturday to consider fund raising

A meeting of the board of directors of the company is scheduled on Saturday, June 10, 2023 to consider a proposal to raise funds

Shares of Titagarh Wagons (TWL) rallied 8 per cent to hit a new high of Rs 427 on the BSE in Friday’s intra-day trade ahead of its board meet on Saturday to consider fund raising plan.

A meeting of the board of directors of the company is scheduled on Saturday, June 10, 2023 to consider, evaluate and approve inter alia a proposal to raise funds.

The company said the fund raise will be considered by issue equity of shares or other securities including through preferential issue, qualified institutional placement, rights issue, or through any other permissible mode or a combination thereof, subject to such regulatory approvals.

At 02:52 pm; TWL was quoting 6 per cent higher at Rs 418.45, as compared to 0.32 per cent decline in the S&P BSE Sensex. Thus far in the calendar year, it has zoomed 91 per cent, as against a 2.4 per cent rise in the benchmark index.

TWL offers mobility solution to billions with its prominent presence in both the Passenger and Freight Rolling Stock. TWL is the largest private sector manufacturer of Wagons and an established player in railway coaches (EMUs, MEMUs).

TWL in the FY23, investor presentation said the execution of its highest ever single order from Indian Railways (IR) for supply of 24,177 wagons amounting to Rs 7,800 crore is on track.

The consortium of BHEL & TWL has won the contract for supply and maintenance of 80 Vande Bharat trainsets to Indian Railways. The value of the order works out to Rs 23,100 crore (including the value of maintenance for 35 years) and Titagarh’s share is 51 per cent.

The consortium of Ramkrishna Forgings and Titagarh has been awarded contract for Forged Wheels by Indian Railways and is setting up forged wheel manufacturing unit with a capacity to manufacture 2 lakh forged wheels per annum. IR will ensure guaranteed off-take of 80,000 wheels per annum over a period of 20 years. The approximate value of this tender is around Rs 12,600 crore for the guaranteed off-take and Titagarh’s share is 50 per cent.

TWL said it is currently operating at about 5-6 coaches per month. The company has delivered 17 trains by March 2023 and would be ramping it up in the beginning to 20 cars per month and then its capacity planned for the passenger coaches over the next 2-3 years is to go up to 70 coaches, 70-75 coaches per month.

The management said the company has strong prospects, the turnaround of the company has been delayed, which the management was expecting to happen in FY23. However, the management estimates that the current order book will help it break even, at least on the EBITDA positive level in FY24.