Titagarh Rail Systems (TRSL) reported a weak performance in Q2FY26; however, due to a b order book and robust medium-to-long-term business outlook, brokerages maintained a BUY rating on the stock, setting a target of ₹1,064.
Railway Stock: Shares of railway wagon manufacturer Titagarh Rail Systems (TRSL) are poised for b performance in the coming days. Despite weaker-than-expected Q2FY26 results, brokerage house Antic Broking has maintained a BUY rating on TRSL shares. The brokerage believes that the company's medium-to-long-term business outlook remains robust, positioning the stock as an attractive option for investors.
₹1,064 Next Target, Significant Upside from Current Price
The brokerage has set a target price of ₹1,064 per share for TRSL. In the previous trading session, the share closed at ₹870. This implies an potential upside of approximately 22 percent from the current price. On Wednesday, the stock opened flat at ₹869.50 on the BSE, hitting a high of ₹881 and a low of ₹857.70 during the trading session. The company's market capitalization was recorded at over ₹11,757 crore.
Weak Performance in the Second Quarter
According to the brokerage, TRSL delivered a subdued performance in Q2FY26. The company's Revenue, EBITDA, and PAT registered year-on-year declines of 24%, 35%, and 45%, respectively. The primary reason for this was weak execution in the FRS (Freight Rolling Stock) segment, which witnessed a 32% YoY decline. This downturn was largely attributed to an inadequate supply of wheelsets from the Rail Wheel Factory, consequently impacting delivery schedules.
Strong Performance from Passenger Rolling Stock
Conversely, the PRS (Passenger Rolling Stock) segment demonstrated robust performance, recording a 115% YoY increase, supported by the dispatch of metro coaches. TRSL's EBITDA declined by 35% to ₹83.60 crore, falling short of the brokerage's estimate of ₹110 crore. The EBITDA margin stood at 10.5%, compared to an estimated 11.6%.
Robust Order Book
The company's order book remains stable at ₹15,100 crore, encompassing projects such as freight wagons, Vande Bharat trains, Ahmedabad Metro, Mumbai Metro, and Surat Metro. TRSL anticipates that the pace of execution will accelerate once the supply of wheelsets from Indian Railways normalizes. The medium-to-long-term business outlook remains b, with future prospects appearing particularly robust due to new opportunities in the Metro, Vande Bharat, and Freight Wagon segments.
Guidance for Investors
Despite the weaker Q2FY26 results, TRSL's robust order book and long-term strategic plans present compelling opportunities for investors. For those considering medium-to-long-term investments, taking into account the brokerage's BUY rating and the target price of ₹1,064 could prove advantageous.
