Shares of Titagarh Rail Systems Ltd fell 4.21% to ₹744.30 on Tuesday after Morgan Stanley cut its target price on the stock to ₹1,090 from ₹1,300, while maintaining an Overweight rating. The brokerage cited execution challenges in the passenger segment and delays in Vande Bharat train production as key concerns.
Morgan Stanley’s View on Titagarh Rail
Morgan Stanley noted that passenger execution in Vande Bharat has been delayed by nine months due to a change in the car design plan. Additionally, the freight segment has faced constraints in Q3 due to inadequate wheelset supply from Indian Railways, affecting offtake.
Key takeaways from the brokerage report:
- Passenger segment has not secured any new orders since October 2023.
- Execution of Ahmedabad Metro project pushed to Q1FY26 from Q4FY25.
- FY25 and FY26 earnings estimates lowered by 14% and 7%, respectively.
- Short-term execution challenges may impact revenue trajectory.
Stock Performance and Market Reaction
Following the downgrade, Titagarh Rail’s stock dropped to ₹744.30, marking a 4.21% decline from its previous close of ₹777.05. The stock traded in a day range of ₹741.05 – ₹779.80. The company’s market capitalization currently stands at ₹100.14 billion, with a P/E ratio of 34.62 and a dividend yield of 0.11%.
While Morgan Stanley remains bullish on the long-term potential of Titagarh Rail, short-term headwinds, including delayed project execution and lack of new passenger orders, continue to weigh on the stock. Disclaimer
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