Titagarh Rail gains 3% as Jefferies sees 5% revenue boost for wagon maker

Titagarh Rail Systems shares gained 3 per cent in Thursday’s trade after the company said it had been included in the approved vendor category of Indian Railways for the supply of traction motors for locomotives. Also, a Jefferies report on the company following the development further boosted sentiment around the counter.

 

The stock opened 1 per cent higher at ₹839 and extended gains to hit an intraday high of ₹858.80 on the National Stock Exchange (NSE).

 

Titagarh Rail Systems is an Indian railway wagon and coach manufacturer, with an annual manufacturing capacity of 12,000 wagons and 300 coaches.

 

 

As of 2 PM, the stock was trading 2 per cent higher at ₹847.55, outperforming the benchmark Nifty, which was up 0.64 per cent.

 

According to  an exchange filing, the company has been "included in the Approved Vendor category of Indian Railways for supply of 3-phase asynchronous traction motor type 6FRA-6068 for 3-phase locomotives, with an approved capacity of 1,200 numbers per annum, with effect from August 19, 2026."

 

Post this, Jefferies estimates 4-5 per cent annual revenue accretion from the order. The order also paves the way for the company’s plans to move up the technology value chain through backward integration.

 

The brokerage has maintained a 'Buy' rating on Titagarh Rail with a target price of ₹990. The target price implies an upside of 19 per cent from the previous close of ₹832.75.

 

Assuming ₹1.6-1.7 million per motor, it estimates around ₹200 crore annual revenue accretion from the order, i.e., 5 per cent of FY27E revenue.

 

While Titagarh is already producing traction motors for locomotives and EMUs, the recent qualification enables meaningful order inflow for the company, the brokerage said. 

 

The company has an Order Book of only 72 traction motors in June 2026 vs 1,200 nos from the qualification. The qualification criterion also enables the company to move up the value chain for propulsion systems.

 

Jefferies said that Titagarh Rail has been focusing on investing in technology-intensive components by forming strategic partnerships and investing in new engineering centers to acquire capabilities for sustainable growth with higher margins. The company had entered into a strategic partnership with ABB India for propulsion systems. It is also investing in engineering centers of excellence to improve design capabilities.

 

Titagarh Rail has hired 200+ engineers at its centers in Kolkata, Hyderabad and Bengaluru with a focus on Car body/bogie design, mechanical & Electrical systems and system assurance, Train Control Monitoring System (TCMS) and Propulsion.

 

Through initiatives on technology and backward integration, the management has guided for 14-15 per cent margins in its Passenger Rail business by FY30E vs 12 per cent near-term guidance. 

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