Titagarh Rail Set For Strong Order Pipeline Amid Slower Execution

Titagarh Rail Systems Ltd. is all set to receive large projects with the state and central elections behind, according to HSBC Global Research. It expects the company to participate in most of metro rolling stock tenders.

However, the slower-than-expected execution of existing metro and Vande Bharat orders has triggered a target price cut for the wagons and coaches manufacturer. HSBC maintained its 'buy' rating, but cut the target price to Rs 1,980 per share from Rs 1,425 apiece earlier, implying a 16.1% upside from the previous close.

The company highlighted rolling stock order pipeline worth Rs 18,000 crore to be awarded in the near term, the brokerage said quoting Titagarh's earnings presentation. "A large part of this prospective pipeline comes from the state of Maharashtra, where state elections were recently concluded."

HSBC expects Titagarh to participate in most of these metro rolling stock tenders, as it continues to be hopeful of winning few projects as well. Apart from metro rolling stock, awarding of railway propulsion systems and traction motors should also resume, it said.

Dispatch plan of the first Vande Bharat train got delayed by six to nine months, while the stainless steel-based metro production line commissioning was delayed by a few months, HSBC said. "But, this issue is now resolved."

The brokerage cut revenue and earnings per share estimates by 9-11% in fiscal 2026-27. These cuts come from both the freight rail system and passenger rail systems segments on account of slower rail freight volume growth and slower execution of existing orders, respectively.

Titagarh's stock fell as much as 1.06% during the day to Rs 1,192.7 apiece on the NSE. It was trading 0.29% higher at Rs 1,202.05 apiece, compared to a 0.01% advance in the benchmark Nifty 50 as of 10:04 a.m.

It has risen 21.5% during the last 12 months and has advanced by 15% on a year-to-date basis. The relative strength index was at 53.

Of the nine analysts tracking the company, eight have a 'buy' rating on the stock, and one has a 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 25.7%.