Titagarh, Jupiter Wagons shares rally as much as 10% amid stories of Rs 40,000 crore order from Indian Railways
Jupiter Wagons shares soared 10% to their day’s excessive of Rs 304 on the BSEwhile Titagarh Rail Techniques rose 9% to Rs 827.50. Texmaco Rail rose over 6% to Rs 115 apiece.
In accordance with a Mint report citing two sources, the proposed tender is anticipated to be barely bigger than the earlier main wagon procurement train undertaken in 2022. The report stated Indian Railways might procure round 35,000-40,000 wagons yearly, with the primary set of orders more likely to be issued throughout the second quarter of the present monetary yr between July and September.
“The trade is finishing orders underneath the earlier Indian Railways wagon tender and contemporary orders with longer visibility will enable the home wagon trade to operate at capability and keep operations of their manufacturing traces,” Sudipta Mukherjee advised Mint.
Mukherjee added that almost one-third, or round 11,000 wagons, of the annual wagon procurement underneath the earlier Railways tender was equipped by Kolkata-based Texmaco, which at present has the capability to fabricate greater than 15,000 wagons yearly.
The report additional stated Indian Railways is at present holding discussions with producers to evaluate their manufacturing capabilities earlier than floating the tender, which is anticipated to be issued in phases.
Final month, Jefferies initiated protection on Titagarh Rail Techniques with a ‘Purchase’ score and a goal worth of Rs 810, a degree the inventory has already crossed. In the identical report, the brokerage initiated protection on Jupiter Wagons with an ‘Underperform’ score and a goal worth of Rs 200, implying a possible draw back of 28% from Rs 277.On Titagarh Rail, Jefferies stated the corporate is more likely to emerge as a significant beneficiary of the shift in direction of passenger and metro coach manufacturing. “We imagine Titagarh can be a key beneficiary of rising passenger and metro coach demand,” the brokerage stated, whereas projecting a 35% income CAGR and a 43% EPS CAGR over FY26-30. The expansion is anticipated to be pushed by a 14-fold enhance in passenger rail methods income together with margin enchancment as the corporate strikes increased up the know-how worth chain.
The brokerage famous that Titagarh’s passenger rail methods order guide stands at Rs 108 billion, equal to 42 occasions FY25 passenger rail methods gross sales, offering sturdy income visibility. It expects the share of passenger enterprise income to rise from 7% in FY25 to 63% by FY28.
In distinction, Jefferies expects development at Jupiter Wagons to reasonable because the enterprise stays closely depending on the lower-growth freight wagon section. The brokerage estimates a 23% EPS CAGR for Jupiter Wagons over FY26-30, considerably decrease than Titagarh’s projected 43%, with wagons anticipated to proceed contributing greater than 60% of total gross sales even by FY28. It additionally stated the corporate’s new wheel manufacturing facility is more likely to make a significant contribution solely after FY28.
“With valuations at 40x FY27E PE, just like Titagarh, we discover Jupiter too costly for the expansion differential,” Jefferies stated, assigning an ‘Underperform’ score and a Rs 200 goal worth. The brokerage values Jupiter’s core enterprise at 20 occasions March 2028 EPS and the wheel plant at 3.5 occasions guide worth.
General, Jefferies believes India’s railway capital expenditure cycle stays firmly intact however stated buyers ought to choose Titagarh Rail Techniques as a consequence of its stronger earnings outlook, bettering return ratios and better publicity to structurally faster-growing passenger and metro rail segments.
(Disclaimer: Suggestions, strategies, views and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions)
