Shares rose after brokerages trimmed estimates but reiterated positive ratings, citing potential upside once supply constraints and tender delays ease.
Shares of Titagarh Rail Systems rose nearly 2% on Wednesday despite a steep drop in first-quarter profit, as Morgan Stanley and Nuvama trimmed estimates and target prices but maintained bullish ratings.
Earnings Review
Titagarh Rail Systems’ Q1 FY26 net profit fell 54% year-on-year to ₹30.8 crore, down 53% from the previous quarter. Revenue declined 25% to ₹679 crore from a year earlier and 32% sequentially.
EBITDA slipped 26% to ₹75.7 crore, with margins at 11.15%, compared with 11.36% a year ago and 10.1% in Q4 FY25.
The company blamed the weak performance on lower wagon offtake and freight revenue, worsened by shortages in freight wheelsets.
At the time of writing, shares of Titagarh were trading at ₹814.95, up ₹15.0 or 1.9%
SEBI-registered analyst Front Wave Research said a sustained move above ₹820 could target ₹950 within 90 days, with support at ₹777.
Brokerage Calls
Nuvama Institutional Equities cut its FY26 and FY27 earnings per share (EPS) estimates by 12% and 14%, respectively, and lowered its target price to ₹1,142 from ₹1,292 while keeping a ‘Buy’ rating.
It cited continued supply chain constraints and a subdued wagon tendering environment.
Morgan Stanley reaffirmed its ‘Overweight’ call but reduced its target price to ₹1,090 from ₹1,300, still implying about 40% upside from current levels.
It warned that inadequate freight wheelset supply from Indian Railways and a nine-month delay in Vande Bharat passenger projects due to car design changes would weigh on near-term earnings.
The brokerage firm also cut FY25 and FY26 earnings estimates by 14% and 7%, respectively, noting the passenger segment has not received new orders since October 2023.
Outlook
The company recently secured government approval for a Lucknow Metro line extension, which could support order inflows in the medium term.
Brokerages, however, expect earnings pressure to persist until supply issues and tender delays are resolved.
What Is The Retail Mood?
On Stocktwits, retail sentiment was ‘bearish’ amid ‘high’ message volume.
Titagarh’s stock has declined 26.5% so far in 2025.
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