Titagarh Wagons hits new high; zooms 65% in 6 months on healthy outlook

Shares of Titagarh Wagons hit a new high of Rs 258.1, as they gained 4 per cent on the BSE in Thursday’s intra-day trade in an otherwise weak market. In comparison, the S&P BSE Sensex was down 1.1 per cent at 59,144 at 10:53 AM.

In past four trading days, the stock has rallied 21 per cent after the consortium of Titagarh Wagons and Bharat Electricals (TWL-BHEL Consortium) emerged as the 2nd Lowest Bidder (L2) for manufacturing cum maintenance of Vande Bharat Trainsets including up-gradation of the Government manufacturing units & Trainset depots.

As per financial bid opening dated March 1, 2023, the TWL-BHEL Consortium has been declared L2. The total quantity is 200 Trainsets and as per tender conditions, L2 is eligible to get 80 Trainsets. The quote of L1 bidder is Rs 120 crore per Trainset, the company said in an exchange filing.

Titagarh Wagons is mainly engaged in the manufacturing and selling of freight wagons, passenger coaches, metro trains, train electricals, steel castings, specialised equipments & bridges, ships, etc.

As per media sources, Indian Railways has set the target to lay 19 km of new track per day in FY24 against the 12 km per day in FY23. Also, in the coming fiscal, the railways will take up the works related to 100 critical transport infrastructure projects for last-and-first-mile connectivity for coal, fertiliser and food grain sectors on a priority basis.

Meanwhile, in past six months, the stock price of Titagarh Wagons has zoomed 65 per cent, as compared to 1 per cent decline in the S&P BSE Sensex. Further, in past one year, it rallied 185 per cent, as against 6.7 per cent gain in the benchmark index.

Titgarh Wagons has over Rs 10,000 crore order book position, with well diversified orders across the three segments. Around 86 per cent of order book is from Freight Rolling stocks backed by recent order received from Indian Railways.

The non-wagon division is expected to contribute more than 50 per cent of order book which will reduce dependency on the wagon business. The company said it has significant plans are in place to participate in other large value metro tenders to further bolster its place in the metro industry. The demand outlook for freight wagons from private customers is very positive; the company said in November 2022 investor presentation.

“With the execution of Pune Metro project on schedule and continued participation in various tenders for the segments viz. ‘Passenger Rolling Stock’ and ‘Shipbuilding, Bridges and Defence’ and tremendous potential for growth thanks to the continued thrust and support provided by the Government of India to the Indian companies under the initiatives such as “Make in India” and consistent focus on improvement in the operations of overseas subsidiary in Italy combined with resource optimization undertaken by the management, the outlook for the current year, being the silver-jubilee year of the Company’s operations, is encouraging,” Titagarh Wagons said in its FY22 annual report.