Shares of Titagarh Rail Systems soared by up to 9.4 per cent at Rs 1,216.30 on the BSE in Thursday’s intraday trade as investors rejoiced in the company’s robust earnings performance in the March quarter of FY24.
This surge followed the company’s announcement of robust financial performance for the March quarter and the entire fiscal year FY 24, marked by record-breaking revenue and net profit figures. Titagarh Rail Systems revenue saw an 8 per cent year on year (YoY) uptick, reaching Rs 1,052.4 crore in Q4FY24 compared to Rs 974.2 crore in Q4FY23.
Earnings before interest tax depreciation and amortisation (Ebitda) surged by 25.7 per cent YoY to Rs 120 crore, contrasting with Rs 95 crore in the previous year.
The Ebitda margins expanded by 160 basis points, reaching 11.4 per cent compared to 9.8 per cent in Q4FY24. The firm posted a net profit of Rs 78.9 crore, up 63.7 per cent YoY versus Rs 48.2 crore in Q4FY23.
The revenue growth was chiefly driven by the company’s larger segment, freight rail systems, which recorded a 25.8 per cent surge in the quarter, amounting to Rs 1,016.9 crore. However, the passenger rail systems segment experienced a decline of 78.6 per cent, plummeting to Rs 35.5 crore.
Titagarh Wagons is an Indian rolling stock manufacturer in the private sector, specialising in a range of products for various rail transport needs. Their core operations include manufacturing freight wagons, semi high-speed trains, metros, transit and propulsion systems, and passenger coaches. These products cater to both the Indian Railways and international export markets.
What Do Analysts Say?
Brokerage firm Morgan Stanley recently initiated coverage on Titagarh Rail Systems, rewarding it with an ‘overweight’ rating, with a price target of Rs 1,285. The brokerage sees Titagarh Rail as a beneficiary of the revival of the Indian railways.
According to estimates from Morgan Stanley, Titagarh is currently valued at 35 times the price-to-earnings ratio (PE) for FY26, a valuation that is deemed fair by the brokerage. According to Morgan Stanley, this valuation is supported by strong earnings visibility and improving return ratios.
Factoring in the strong growth prospects for the company, Morgan Stanley projects a robust 28 percent earnings compound annual growth rate (CAGR) for FY24-27.
At 10:25 AM; the stock of the company was trading 3.86 per cent higher at Rs 1154.30 per share. By comparison, the S&P BSE Sensex was trading marginally lower by 0.03 per cent. The company is presently trading at a price to earnings multiple of 58.96 times.
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