Morgan Stanley has maintained an Overweight rating on Titagarh Rail with a target price of ₹1,027, despite the company posting a weaker-than-expected Q1FY26 performance. Revenue came in 24% below the brokerage’s estimates, primarily due to a 27% miss in freight revenue on account of lower wagon dispatches (-21% YoY) and reduced wheelset supply from Rail Wheel Factory.
Passenger segment revenue, which accounts for 11% of the company’s mix, grew 27% YoY, beating Morgan Stanley’s estimate of 19%. Segment margins showed mixed trends, with freight margins declining 95 basis points YoY to 11.2% (versus the estimated 12%), while passenger margins improved by 500 basis points to 11%, in line with expectations.
Adjusted PAT missed estimates by 52%, impacted by the operating miss and a higher-than-expected JV loss of ₹110 million (versus the estimated ₹30 million).
Disclaimer: The above views are those of Morgan Stanley. This update is for news reporting purposes only and does not constitute investment advice.
