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Shares of Titagarh Rail Systems gained nearly 3% to hit the day’s high of Rs 857 on the BSE on Wednesday after Wall Street major Jefferies raised the target price to Rs 990 from Rs 810, implying an upside of 19% from current market levels.

With a Buy rating, the international brokerage raised the target by 23%. Jefferies said Titagarh Rail Systems delivered a stronger-than-expected quarter, and improving execution is likely to drive a re-rating of the stock going forward.

The brokerage believes Titagarh is well-positioned to benefit from rising demand for passenger and metro coaches, supported by government-led infrastructure initiatives. It estimates a 44% EPS CAGR over FY26-30 and expects the company’s strong order book in the passenger segment to provide healthy earnings visibility.

Titagarh delivered 64 coaches in FY26, ahead of Jefferies’ estimate of 60 coaches. While this fell short of the management’s earlier guidance of 100-120 coaches, the shortfall was largely anticipated due to execution delays in the first half of FY26.

Management has reiterated confidence in delivering 200-220 coaches in FY27, compared with Jefferies’ estimate of 193 coaches, citing the resolution of initial execution challenges. On the flagship Vande Bharat project, the company expects to deliver two trains in FY27, in line with Jefferies’ projections, with the prototype scheduled for supply in the December 2026 quarter.

Margins in the March quarter came in significantly ahead of expectations at 19%, compared with Jefferies’ estimate of 12%, supported by a sharp increase in execution of the Bengaluru Metro project, which is being executed as a job contract. Management has guided for margins of around 12% in the near term, with a gradual improvement towards 15% as the company advances up the technology value chain.
Rail wagon sales declined 29% year-on-year due to supply-side constraints. While Jefferies expects wagon sales to fall a further 5% in FY27, it forecasts a largely stable trajectory over FY27-30, supported by its estimate that Indian Railways’ cargo volumes could reach around 3 billion tonnes by FY35, compared with the FY30 target.The company currently has an order book of 6,500 wagons, providing visibility for about 97% of Jefferies’ FY27 wagon sales estimates, although visibility beyond FY27 remains limited. Separately, Titagarh has secured 28% capital assistance for its brownfield shipbuilding expansion plans and is evaluating technology partnerships and potential joint ventures with shipyards.

The brokerage noted that a recent report by Live Mint indicated Indian Railways is considering an order for 1 lakh wagons, which could significantly improve earnings visibility for wagon manufacturers.

The valuation assigns 30x March 2028 estimated EPS to the core business, up from 25x previously, reflecting positive developments around potential wagon orders and the upcoming wheel joint venture, which it values at 2.5x its investment value. Key risks to the outlook include delays in wagon orders or wheel supplies from Indian Railways, as well as weaker-than-expected execution.

Titagarh Rail Q4 snapshot

Titagarh Rail reported a net profit for the quarter at Rs 53.96 crore, compared to a net loss of Rs 122.4 crore that the company reported last year.

Titagarh Rail’s revenue in the March quarter declined by 12.9% to Rs 875.4 crore from Rs 1,005.6 crore in the previous year.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) declined 4.4% to Rs 97.3 crore in the March quarter from Rs 96.56 crore last year, while margins stood at 11% from 10% last year.

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Mumbai: The Reserve Bank of India (RBI) is likely to maintain the status quo on interest rates in its monetary policy announcement on Friday as the impact of the ongoing crisis in West Asia on economic growth remains difficult to assess, according to a report by Bank of Baroda.

The report said the central bank is expected to continue with a data-dependent approach while balancing growth concerns, inflation risks and global uncertainties.

“We may expect status quo on rates as the impact on growth due to the crisis is still difficult to ascertain, and on the inflation front, an increasing trend is imminent,” the report said.

Bank of Baroda also expects the RBI to retain its neutral policy stance, saying it provides the central bank with the flexibility to respond to incoming economic data.

According to the report, several developments have taken place since the RBI’s previous monetary policy meeting.

It noted that there have been reports of a 60-day extension of the ceasefire in West Asia, although uncertainty surrounding the situation remains high. While international crude oil prices have shown some correction following the development, the report cautioned that volatility in crude prices cannot be ruled out unless a formal peace agreement is reached.
The report highlighted that one of the most significant developments since the last policy meeting has been the increase in petrol and diesel prices. According to Bank of Baroda, the RBI’s inflation projections are likely to reflect the impact of these higher fuel prices.

“We expect the RBI’s CPI projection for FY27 to be revised upward,” the report stated.

The report also pointed to volatility in the Indian rupee as an important development in recent months. However, it noted that exchange rate movements do not directly fall under the scope of monetary policy decisions.

From a growth perspective, the report believes maintaining rates at current levels remains the preferred option at this stage.

It noted that headline consumer price inflation, which remains the RBI’s key policy variable, has not yet fully reflected the impact of higher costs being passed on across the economy.

As a result, the report expects the upcoming policy statement to be relatively more hawkish in tone, particularly through an upward revision in inflation forecasts and a stronger emphasis on near-term inflation risks.

The report concluded that, given the evolving geopolitical situation, inflation concerns and uncertainty around growth, the RBI is likely to wait for more data before making any major changes to interest rates.

Reserve Bank of India (RBI) Governor Sanjay Malhotra is set to announce the outcome of the Monetary Policy Committee (MPC) three-day meeting on Friday, June 5.