Jefferies initiates coverage on Titagarh Rail and Jupiter Wagons; check TP

Jefferies has set a target of ₹810 for Titagarh and ₹200 for Jupiter Wagons, implying an upside of 28 per cent for Titagarh, while a 22 per cent downside for Jupiter Wagons

Jefferies has initiated coverage on Titagarh Rail with ‘Buy’ and Jupiter Wagons with ‘Underperform’. The brokerage has set a target of ₹810 for Titagarh and ₹200 for Jupiter Wagons, implying an upside of 28 per cent for Titagarh, while a 22 per cent downside for Jupiter Wagons.

 

At 12:23 PM, Titagarh Rail Systems shares gained 2.57 per cent higher at ₹630.8 and Jupiter Wagons stock was up 0.04 per cent at ₹256.6 per share. In comparison, the BSE Sensex was down 0.25 per cent at 73,134.01.  CATCH STOCK MARKET UPDATES TODAY LIVE

Titagarh Rail: 

Titagarh is viewed as a primary beneficiary of the shift toward high-tech passenger and metro segments. Analysts forecast a 14x rise in Titagarh’s passenger segment revenues between FY26 and FY30, supported by a robust order book.

 

 

The company is expected to deliver a 43 per cent earnings per share (EPS) compound annual growth rate (CAGR) over FY26-30, with return on equity (RoE) projected to more than double to 16 per cent by FY30 as plant utilisation rises.

 

Its core business is valued at 25x Mar’28E EPS, which analysts believe is justified given the superior growth profile compared to broader industrial peers.

Jupiter Wagons: 

Jupiter is expected to post a steady 23 per cent EPS CAGR through FY30, which is significantly lower than Titagarh’s 43 per cent trajectory. Analysts noted that Jupiter currently trades at 40x FY27E price-to-earnings (P/E), a multiple similar to Titagarh. Given the growth differential and Jupiter's higher exposure to the slower-growing wagon segment, the brokerage finds the current stock price "too expensive."  READ | FPI, MF positioning leaves HDFC Bank vulnerable to further downside

Sector outlook

Modernisation and metros to lead growth

Jefferies expects a healthy 10 per cent compound annual growth rate (CAGR) in Indian rolling stock capital expenditure between FY26 and FY30. This growth is anticipated to be led by:

 

Passenger & metro coaches: Projected to grow at a 9-16 per cent CAGR, driven by the government's target of 800 Vande Bharat trainsets by FY30 and the doubling of India’s Metro network to 2,000 km by FY33.

 

Locomotives: Expected to see a 9 per cent CAGR to support heavy-haul freight on new dedicated corridors.

 

Wagons: Anticipated to grow at a more modest 5 per cent CAGR, as analysts estimate a 6 per cent annual cargo growth for Indian Railways, trailing the official 16 per cent target.

Urban transit as a secular driver

The brokerage underscored that India’s Metro rail network is a secular growth story, having expanded 4x since FY14. High entry barriers—including mandatory 75 per cent domestic procurement and complex technology requirements—limit competitive intensity to only three active players, providing long-term revenue visibility for incumbents.  READ | RP-Sanjiv Goenka Group stock RPSG Ventures up 102% in 7 days amid IPL frenzy

Key risks to monitor

While the outlook is positive, analysts flagged potential downsides, including a lack of visibility for new wagon orders once current books are exhausted, execution delays in large-scale trainset projects, and the potential entry of international competitors into the passenger coach segment. Conversely, a sharper-than-expected rise in railway cargo or JV profits remains an upside risk for the sector.

 

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