Titagarh Rail shares zoom 9% on robust Q4, dividend payout

Shares of Titagarh Rail Systems Ltd surged as much as 9.4% to hit an intraday high of ₹1,216.30 apiece on the BSE, a day after the rail wagons manufacturer reported a consolidated net profit of ₹78.94 crore in the March quarter, up 63.6%, against ₹48.2 crore in the corresponding period of the previous year.

The scrip opened higher at ₹1,149.85, up 3.4%, as against the previous closing price of ₹1,111.35. At 1:30 pm, the share price of Titagarh Rail stood at ₹1,210.70. In contrast, the broader BSE Sensex was trading 418.54 points or 0.57% at 72,568.49.

The company’s market capitalisation stood at ₹16,240.98 with more than 3.5 lakh shares exchanging hands on the BSE, as against the two-week average of 1.47 lakh shares. Titagarh Rail Systems Ltd shares hit a 52-week high of ₹1,249 on January 20 this year and a 52-week low of ₹321 on May 24 this year.

In the past one month, three months and one year, the counter has surged 24.02%, 26.87% and 270.78%, respectively. In the year-to-date period, the counter has surged 16.59%.

In the January-March quarter of FY24, the revenue of operations of Titagarh Rail stood at ₹1,o52.4 crore, up 8% as against ₹974.2 crore in the corresponding period of the previous year. Of this, revenue from freight rail systems stood at ₹1,016.87 crore, whereas the revenue from passenger rail systems was at ₹355.3 crore.

 The company’s EBITDA (earnings before interest, tax, depreciation and amortization) margin stood at 11.4%, as against 9.8% in the corresponding period of the previous fiscal year.

For full fiscal 2023-24, the company’s consolidated net profit stood at ₹286.14 crore, as against ₹125.71 crore in FY23. The revenue from operations of Titagarh Rail Systems stood at ₹3,853.30 crore in FY24, as against ₹2,779.59 crore in FY23.

The company has recommended a dividend of 40% (i.e. ₹0.80) per equity share of ₹2 each of the financial year 2023-24.

Meanwhile, the company has reappointed Anil Kumar Agarwal, Executive Director, designated as Deputy Managing Director & CEO (Freight Rail Systems) of the Company for three years with effect from May 29, 2024.

Following Q4, brokerage firm Morgan Stanley has given an ‘overweight’ rating on the rail stock, with a target price of ₹1,285. According to the brokerage firm, Titagarh Rail is a beneficiary of the revival of the domestic railways. Analysts at Morgan Stanley say that as per estimates, Titagarh Rail is valued at 35 times the price-to-earnings ratio (PE) for FY26. “This valuation is supported by strong earnings visibility and improving return ratios, “ says the rail wagon manufacturer.

Kolkata-based Titagarh Rail Systems designs and manufactures wagons such as container flats, grain hoppers, cement wagons, clinker wagons, and tank wagons. It is the country’s leading railway rolling stock manufacturer.