Titagarh Rail Systems Limited, a leading private sector manufacturer of freight wagons for Indian Railways, is poised to play a significant role in passenger coach manufacturing.
Private companies are increasingly participating in the modernization drive of Indian Railways. Titagarh Rail Systems Limited is a prime example, having not only established expertise in freight wagons but also making significant strides in passenger coach manufacturing. This progress was evident on Monday in the stock market, where Titagarh's shares showed strength despite a broader market downturn.
Titagarh's Stellar Performance Amidst a Downturn
While most companies on the Indian stock market traded lower on Monday, Titagarh Rail Systems' shares registered an increase of over two percent. The company's stock closed at ₹866.75 on the BSE, having opened at ₹852.80 and reaching a high of ₹888.55 during the day. Around 11:30 AM, it was trading at ₹884.20. This performance contrasted with the prevailing market trend, clearly indicating investors' growing interest in the company.
Reasons for the Rise in Titagarh Rail Systems' Share Price
The primary driver of the company's success is its rapidly expanding passenger coach business. Titagarh Rail Systems is now manufacturing coaches for high-end passenger trains like Metro and Vande Bharat, in addition to freight wagons. Furthermore, the company is soon to commence the manufacturing of forged wheels (rail coach wheels) for Indian Railways, which were previously imported.
From Wagons to Vande Bharat: A Transformative Journey
Titagarh Rail Systems was previously known as a leading manufacturer of freight wagons. Its experience and quality in this area have been recognized both domestically and internationally. The company's Deputy Managing Director, Prithvish Choudhary, recently stated that Titagarh is now viewed as a complete rail solutions provider rather than just a wagon manufacturer. He also predicted that the passenger coach business may surpass the freight wagon business in the future.
Busy Manufacturing Metro and Sleeper Vande Bharat Coaches
Titagarh's plant in Uttarpara, Kolkata, is currently manufacturing metro coaches for Bengaluru, Pune, Ahmedabad, and Surat. Additionally, the company has received an order to manufacture 80 sleeper Vande Bharat train sets in collaboration with Bharat Heavy Electricals Limited (BHEL). This project is part of Indian Railways' larger vision to domestically manufacture high-speed, comfortable trains for long-distance travel.
Government Support for Coach Production Provides Incentive
According to the company's Deputy MD, the government's policy of promoting passenger coach manufacturing has encouraged the company to expand in this sector. He mentioned that while passenger coaches previously contributed only 5-6 percent to the company's total business, this share could reach 50-60 percent within the next 4-5 years.
62 Percent of Order Book Dedicated to Passenger Rail
The company currently has an order book of approximately ₹24,500 crore. Of this, 62 percent of orders are related to passenger rail, while 38 percent are for wagons. The company has also almost completed the delivery of 34 train sets to the Ahmedabad Metro, with 33 sets already delivered. This demonstrates the company's ability to complete large projects on time.
A Significant Step Towards Domestic Wheel Production
The company has established a joint venture, 'Ramkrishna Titagarh Rail Wheels Limited', with Ramkrishna Forgings. This joint venture is setting up a new plant near Chennai that will manufacture wheels for Rajdhani Express and Vande Bharat Express trains. Previously, such wheels were imported. This plant will be fully operational by 2026 and will have an annual production capacity of 2.28 lakh wheels.
20-Year Order from Indian Railways
This plant has received a large order from Indian Railways for 20 years, under which 80,000 forged wheels will be manufactured annually. These wheels will be used in modern trains such as Metro, wagons, and Vande Bharat. This will boost self-reliance in rail wheel manufacturing in India and reduce dependence on foreign imports.
Strong International Presence
Titagarh's presence is not limited to India. The company also has two factories in Italy – in Savona and Caserta. In India, its production units are located in Kolkata, Bharatpur (Rajasthan), Hyderabad, Chennai, and Bengaluru. This wide geographical spread enables the company to deliver timely production and supply for railway projects across the country.
Increased Investor Confidence
The company's b foothold in diverse areas such as passenger coaches, metro train sets, and rail wheel manufacturing has boosted investor confidence. At a time when most sectors are under pressure, Titagarh Rail Systems' b standing in the stock market is a testament to its strategic direction and growth potential.
