Stock of this railway wagon company has zoomed over 800% in 20 months

The stock of railway wagons maker had hit a record high of Rs 867 on Thursday, October 19. In the past year, the market price of TRSL has zoomed 438 per cent

Shares of Titagarh Rail Systems Limited (TRSL) rallied 9 per cent to Rs 866 on the BSE in Friday’s intra-day trade after the company inked a Rs 350-crore contract with Gujarat Metro Rail Corporation Limited (GMRC) for the Ahmedabad Metro Rail Phase-II Project.

The stock of railway wagons maker had hit a record high of Rs 867 on Thursday, October 19. In the past one year, the market price of TRSL has zoomed 438 per cent, as compared to 10.5 per cent rise in the S&P BSE Sensex.

While, in the past 20 months, the stock has skyrocketed 844 per cent from a level of Rs 91.70 on February 21, 2022.

In an exchange filing, TRSL said that the company signed a contract with GMRC for the design, manufacture, supply, testing, commissioning and training of 30 standard gauge cars for Ahmedabad Metro Rail Phase-II Project.

The Ahmedabad Metro Rail Phase-II Project is being implemented by GMRC at a cost of Rs 13,500 crore. The project will add 28.2 km of metro lines to the city's existing network.

TRSL presence in both the passenger and freight rail systems including railway wagons, components, passenger coaches (EMU/MEMU) and Metro Coaches. TRSL is the largest private sector manufacturer of railway wagons and an established player in passenger coaches.

The company has been awarded the largest ever order for wagons by Indian Railways in addition to the orders for manufacture and supply of Metro Trains for Pune Metro and Surat Metro projects.

TRSL is also the co-recipient of prestigious orders for Vande Bharat trains & Forged Wheels.

Meanwhile, in September quarter (Q2FY24), TRSL posted strong earnings with its profit before tax more than doubling to Rs 95 crore against Rs 46 crore in Q2FY23. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved to 12.3 per cent from 9.07 per cent in a year ago quarter. Revenue grew 54 per cent year-on-year at Rs 935 crore.

TRSL’s order book position has improved with significant orders inflow from the passenger rail systems segment in H1FY24. The order book has improved from Rs 10,645 crore in FY22 providing medium to long term revenue visibility based on execution timelines.

As on September 30, 2023, TRSL total order book amounted Rs 28,212 crore. Of these orders, 51 per cent or Rs 14,342 crore orders are from freight rolling segment and the balance 49 per cent or 13,870 crore orders from passenger rolling segment, the company said.

CRISIL Ratings believes that TRSL’s operating performance will benefit over the medium term from existing healthy order book and sustenance of healthy financial risk profile.

TRSL has a capacity of 8,400 wagons per annum with plans to enhance capacity to 12,000 wagons per annum by FY25. TRSL has maintained its leadership position in the segment and accounted for 32 per cent (24,177 wagons) of the orders awarded by IR in May 2022. Access to technical capability through foreign collaborations enhances the business risk profile, the rating agency said.