Shares of Titagarh Rail System rallied nearly 5% to hit a fresh all-time high on Wednesday after the private railway coaches manufacturer informed exchanges that it has bagged a new order worth around ₹857 crore. The company, formerly known as Titagarh Wagons, has received Letter of Acceptance (LOA) from the Gujarat Metro Rail Corporation (GMRC), for design, manufacture, supply, testing, commissioning, and training of 72 numbers of standard gauge cars for Surat Metro Rail Phase-I. The execution will start 76 weeks after signing the contract and is scheduled to be completed in 132 weeks thereafter.
“The order value of the project is about ₹857 crore and execution would start 76 weeks after signing the contract. The project is scheduled to be completed in 132 weeks thereafter,” Titagarh Rail said in a BSE filing on June 27.
Buoyed by new order, Titagarh Rail shares opened 3% higher at ₹520.85 against the previous closing price of ₹505.55 on the BSE. In the early trade so far, the railway stock has surged as much as 4.7% to touch a new record high of ₹529.20 mark. The market capitalisation stood at ₹6,110 crore at the time of reporting.
The smallcap stock has turned multibagger in the last one year, surging as much as 440% from its 52-week low of ₹98.3 touched on June 28, 2022. In the calendar year 2023, the counter has rallied 124%, while it gained 43% in a month. In the last one week, the stock has risen nearly 6%.
Earlier this month, the consortium between Titagarh and Ramkrishna Forgings secured an order worth ₹12,226.5 crore from the Indian Railways, under the Atmanirbhar Bharat Initiative by the Ministry of Railways, Government of India. In March this year, both the companies had formed a special purpose vehicle (SPV) for the manufacturing of train wheels.
The order was for the manufacturing and supply of 15,40,000 forged wheels of different rolling stocks to the Railways over a period of 20 years. The wheels manufactured under this agreement will cater to the requirements of multiple platforms, such as the LHB coaches, WAG9 Locomotives, Vande Bharat Express Trains, etc.
Both the companies in a joint statement had said that the RKFL-TRSL consortium would establish a manufacturing facility to manufacture these forged wheels, with total annual production targeted at 2,00,000 wheels when fully operational. “Not only will this facility address the demands of the domestic railway sector, but also help the consortium address the latent demand from the private sector as well as export markets,” it had said.
The successful execution of this project will require a capital expenditure ranging from ₹1,000 to ₹1,200 crore. To meet this financial requirement, both companies will contribute equity on an equal basis, ensuring a robust funding structure to support the project's capital expenditure needs.
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