This railway stock price hits all-time high today; what should be your strategy now?

Shares of Titagarh Wagons – a manufacturer of Indian Railway coaches – touched a fresh all-time high of Rs 365 per share, after gaining 12.5 per cent on the BSE during Thursday’s session.

The heavy buying in the stock can be attributed to the wagon maker’s robust March quarter earnings for the financial year 2022-23 (Q4FY23) and to strong management commentary.

Titagarh Wagon Q4 result

Titagarh Wagons reported a net profit of Rs 48.2 crore in the last three months period of the fiscal year gone by as compared to a loss of Rs 24.9 crore in the same quarter a year ago. Its revenue grew more than 130 per cent year-on-year in Q4FY23 at Rs 974.21 from Rs 422.18 crore in Q4FY22.

Management Commentary

Titagarh Wagon’s management has given a margin guidance of 8 to 10 per cent and aims to do a capacity expansion, going forward. The company said it will collaborate with Ramkrishna Forgings to produce railway wheels soon.

What should investors do?

Brokerage firm B&K Securities initiated a ‘buy’ call on the stock with a target price of Rs 404 apiece as it believes the government’s focus on freight, passenger, and public transport creation such as metro and high-speed rail will aid the company.

Titagarh Wagons has strong capabilities and available capacities to emerge as the biggest beneficiary in the railway value chain, the brokerage added.

ICICI Securities in a report has said that the stock has witnessed a strong run-up (3x) in the recent past on the back of robust order inflows.

Titagarh Wagons’ stock performance

Titagarh Wagons’ stock outperformed the markets as it gained over 50 per cent against Nifty50’s rise of about one per cent, year-to-date (YTD).

On Wednesday, Titagarh Wagons’ shares declined over 4 per cent and closed at 324.15 apiece on the exchanges.

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