Nuvama upbeat on Titagarh Rail as MRVC floats ₹21,000 crore coach tender

For Titagarh Rail Systems, which has steadily expanded its capacity and capabilities, the opportunity is major.

Nuvama on Titagarh Rail: After a prolonged lull, India’s railway coach manufacturing sector is witnessing renewed momentum, analysts said. 

 

The Mumbai Railway Vikas Corporation (MRVC) has invited bids for 2,856 air-conditioned coaches for the suburban rail network under the 'Vande Metro' initiative, a contract valued at nearly ₹21,000 crore. 

The development has prompted Nuvama Institutional Equities analysts to reiterate their ‘Buy’ rating on Titagarh Rail Systems stock, one of the few private players positioned to benefit.

 

The tender forms part of the Mumbai Urban Transport Project (MUTP) phases III and III-A. MRVC, a joint venture between the Ministry of Railways and the Government of Maharashtra, aims to procure 238 air-conditioned local trains - 47 under MUTP-III and 191 under MUTP-3A - to modernise the suburban network. The tender includes not just supply of the coaches but also 35 years of comprehensive maintenance and construction of two new depots.

 

 

As per the bid terms, the authority could award the entire order of 2,856 coaches to a single player, requiring delivery within 7.5 years from the appointed date. Alternatively, it may split the order – 1,715 coaches for the lowest bidder (L1) and 1,141 for the second-lowest (L2), provided the latter matches the L1 price – with both deliveries to be completed within 6.5 years. The first prototype 12-car rake is to be delivered in 24 months, with the second due in 26 months.

 

Crucially, the tender mandates domestic manufacturing of the Vande Metro rakes, aligning with the government’s ‘Make in India’ initiative. This condition narrows the competition considerably, leaving only three private manufacturers with existing facilities in India, Alstom, BEML, and Titagarh Rail, analysts noted.

 

Analysts at Nuvama highlighted that coach manufacturing has been subdued for nearly two years, with few orders in the pipeline. However, activity has picked up in recent months, with multiple metro rail contracts being finalised across the country. The MRVC tender, given its scale, analysts believe, is expected to keep order inflows strong for years to come. Even if the project is split between two companies, the third player will still have opportunities in future tenders for Vande Bharat and metro projects, ensuring sustained demand.

 

For Titagarh Rail, which has steadily expanded its capacity and capabilities, the opportunity is major. With limited competition and government backing for large-scale urban transport projects, analysts believe the company is well placed to capture a meaningful share of upcoming orders.

 

Accordingly, the brokerage maintained a positive stance on Titagarh Rail, underscoring its growth prospects in the reviving railway coach manufacturing sector.

 

On the bourses, Titagarh Rail Systems shares have gained 5.3 per cent in the past month and 19.3 per cent over six months, though the stock remains down 38.5 per cent over the past year.