Titagarh Rail Systems' Passenger Rail Systems (PRS) business is expected to scale through FY30, supported by its strong order book, an execution pick-up and government railway modernisation plans, according to Jefferies.
The brokerage expects metro coach production to rise to 500-550 coaches by FY30E from 64 in FY26, while management has guided for around 200-220 coaches in FY27E. Jefferies estimates a 44% FY26-30E compound annual growth rate in earnings per share, led by the strong PRS order book.
“Management remains confident of scaling its Passenger Rail Systems business through FY30,” Jefferies said in its takeaways from the Jefferies India Forum 2026.
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Metro coach production
FY26 execution missed the 100-120 coach target because of initial tooling issues, which have now been resolved, according to Jefferies. Vande Bharat execution remains on track, with the first prototype expected in 2H FY27E.
The company has a Rs 164 billion metro order pipeline, while a recent MoU with Siemens could pave the way for international metro stock opportunities, Jefferies said.
Management is guiding for around 12% near-term margins, with margins expected to expand to 15% as Titagarh Rail moves up the technology value chain. The company also aims to manufacture high-speed rail coaches by partnering on propulsion technology.
Freight rail and shipbuilding
Jefferies described Freight Rail Systems as “the cash cow”, with the business expected to remain steady. LiveMint recently reported plans by Indian Railways to order 100,000 wagons, while management expects fresh orders in 2H FY27E.
Titagarh Rail had an order book of 5,300 wagons as of June 2026, providing visibility for three to four quarters. Management guides for 600-650 wagons a month in the interim, versus 515 wagons a month factored into Jefferies' FY27E estimates.
The company is building a Rs 6 billion shipyard at Falta, West Bengal, supported by a 28% capital subsidy. It has Rs 5 billion of orders and is exploring technology partnerships and potential joint ventures.
Jefferies expects around 75 basis points of EBITDA margin expansion through FY28E and RoE to double to around 14% by FY28E. Key risks include delays in wagon orders, wheel supply from Indian Railways and execution slippages.
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