Titagarh Rail Systems’ shares soared, gaining over 9 percent in the morning trade on May 16, as investors celebrated the company’s robust financial performance during the March quarter of FY24. At 9:55 am, Titagarh Rail’s shares were trading at Rs 1,184.70 on the National Stock Exchange (NSE).
The rail wagon manufacturer’s net profit for the quarter surged by an impressive 64 percent year-on-year, reaching Rs 79 crore in Q4 FY24, up from Rs 48.2 crore recorded in the corresponding quarter of the previous fiscal year. Revenue also witnessed an 8 percent year-on-year increase, rising to Rs 1,052.4 crore in the quarter under review. While growth in the freight segment revenue mitigated the weakness in the passenger segment contribution as the Pune contract nears completion, better operational efficiencies enabled the company to expand its EBITDA margin to 11.4 percent in the January-March quarter, up from 9.8 percent in the same quarter last fiscal.
Brokerage firm Morgan Stanley recently initiated coverage on Titagarh Rail Systems, awarding it an ‘overweight’ rating and setting a price target of Rs 1,285. The brokerage firm perceives Titagarh Rail as a beneficiary of the revival of the Indian railways. According to Morgan Stanley’s estimates, Titagarh is currently valued at 35 times the price-to-earnings ratio (PE) for FY26, a valuation deemed fair by the brokerage, supported by strong earnings visibility and improving return ratios.
Factoring in the company’s robust growth prospects, Morgan Stanley projects an impressive 28 percent earnings compound annual growth rate (CAGR) for Titagarh Rail Systems during the period FY24-FY27.
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