Titagarh Rail Systems - Rolling Stock Gathers Momentum: Systematix Initiates Coverage With A 'Buy' Rating

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.We initiate coverage on Titagarh Rail Systems Ltd. with a 'Buy' rating and a target price of Rs 1,202, based on 28 times price to earnings ratio on FY26E.Titagarh Rail Systems, India’s largest wagon manufacturer, is slated to immensely benefit from Indian railways’ plan to spend $750 billion on rail infrastructure. This entails adding-nearly 50% to the existing freight wagons infrastructure,a huge metro system, and high-speed Vande Bharat trains. Titagarh Rail Systems’ strong order book of Rs 282 billion provides robust revenue visibility for the next ~four years. The company has already bagged orders worth Rs 23 billion for metro cars and Rs 240 billion for 1,280 Vande Bharat coaches (with joint venture partner) outlying opportunities for another ~8,000 coaches to be awarded by the Indian railways in the coming few years. On the freight side, the company’s plan to expand capacity to ~1,000 wagons/month from ~700 currently, bodes well for its growth. Titagarh Rail Systems’ tie-up with Bharat Heavy Electricals Ltd. for Vande Bharat and RK Forging for wheel manufacturing (Titagarh Rail Systems has signed a contract with Indian railways to supply 80,000 wheels/annum for 20 years) would enhance its capabilities and open various sustainable growth opportunities. Despite the marginal rise in working capital cycle, we expect Ebitda margin to hover at 11.3%-11.7% during FY24E-FY26E, with return on equity of 24-25%. We forecast a robust 35%/43%/54% compound annual growth rate in the company’s revenue/Ebitda and PAT during FY23- FY26E, respectively..Key risk: Change in the government’s policy or any sharp fall in Indian railways capex..Click on the attachment to read the full report:.Motilal Oswal - Riding On Financialisation Is A Winning Strategy: ICICI Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Titagarh Rail Systems - Rolling Stock Gathers Momentum: Systematix Initiates Coverage With A 'Buy' Rating

We initiate coverage with a 'Buy' rating and a target price of Rs 1,202, based on 28 times price to earnings ratio on FY26E.

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Titagarh Rail Systems - Rolling Stock Gathers Momentum: Systematix Initiates Coverage With A 'Buy' Rating

We initiate coverage with a 'Buy' rating and a target price of Rs 1,202, based on 28 times price to earnings ratio on FY26E.

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