Titagarh Rail Systems Ltd Share Price – NSE  /  BSE

Capital Goods-Non Electrical Equipment, Small Cap

Titagarh Rail Systems (TRSL) has commenced the export of traction converters, pursuant to which the first batch of 8 converters were shipped to Titagarh Firema S.p.A (Titagarh Firema), Italy on 19 July 2024. The said export is part of a EUR 7.18 million (Rs 65 crore approx.) order received by TRSL from Titagarh Firema and marks the first rollout of traction converters from Passenger Rolling Stock Facility of Titagarh, India.

Titagarh Firema received an order from Regione Lazio, Italy, for the design, manufacture and supply of 38 trainsets for a total value of approximately EUR 276 Million, with a design speed of 100 kmph. .

Titagarh received the order from Firema, Italy to supply traction converters for the first batch of 11 trains to Regione Lazio Viterbo line, operating at 3 KV, and the Regione Lazio Lido line, operating at 1.5 KV. TRSL plans to ship two train sets, or eight converters, each month to complete the order.

Titagarh India is proud to announce the successful production and indigenisation of these converters. The design was expertly handled by Titagarh's Italian associate, Titagarh Firema, showcasing a seamless partnership between the entities. This collaboration has laid a robust foundation for the manufacturing systems and processes for such highly technological items in Uttarpara.

The Titagarh India Passenger Rolling Stock Facility currently has a manufacturing capacity of 25 converters per month, which it plans to increase to 50 converters per month, including Mainline Electric Multiple Unit (MEMU) and Electric Multiple Unit (EMU) converters.

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Titagarh Rail Systems will hold a meeting of the Board of Directors of the Company on 30 July 2024.

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The benchmark indices continued to marched higher and hit a fresh intraday high in mid-afternoon trade. The Nifty traded above the 23,850 mark. Private Bank shares gained for the second consecutive trading sessions.

At 14:30 IST, the barometer index, the S&P BSE Sensex, was up 601.92 points or 0.76% to 78,639.81. The Nifty 50 index gained 144.05 points or 0.61% to 23,865.35.

The Sensex and Nifty clocked an all-time high of 78,704.54 and 23,880.50 respectively in mid-afternoon trade. Further the Nifty Bank registered an all-time high of 52,958.75 in mid-afternoon trade.

In the broader market, the S&P BSE Mid-Cap index fell 0.11% and the S&P BSE Small-Cap index added 0.14%.

The market breadth was negative. On the BSE, 1,903 shares rose and 1,943 shares fell. A total of 121 shares were unchanged.

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The Nifty Private Bank index rose 0.65% to 26,390.05. The index added 2.36% in the two consecutive trading sessions.

Kotak Mahindra Bank (up 1.58%), ICICI Bank (up 1.43%), RBL Bank (up 1.35%), Federal Bank (up 0.89%) and Bandhan Bank (up 0.52%), IndusInd Bank (up 0.3%), Axis Bank (up 0.16%) edged higher.

On the other hand, HDFC Bank (down 0.21%), City Union Bank (down 0.14%) and IDFC First Bank (down 0.06%) declined.

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The yield on India's 10-year benchmark federal rose 0.13% to 6.992 as compared with previous close 6.991.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.5750, compared with its close of 83.4300 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement shed 0.04% to Rs 71,435.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.18% to 105.79.

The United States 10-year bond yield gained 0.93% to 4.277.

In the commodities market, Brent crude for August 2024 settlement added 16 cents or 0.19% to $85.17 a barrel.

Stocks in Spotlight:

Titagarh Rail Systems (TRSL) advanced 7.10% after CRISIL Ratings upgraded its ratings on the bank facilities of the company to ‘CRISIL AA-/Stable/CRISIL A1+’ from ‘CRISIL A+/Stable/CRISIL A1’.

RattanIndia Enterprises slipped 3.34%. The company’s chief operating officer (COO), Vijay Nehra resigned from his position effective from 24 June 2024.

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CRISIL Ratings stated that the ratings upgrade factor in the improved business and financial risk profiles. The business risk profile improvement takes into account better operating efficiency as reflected in higher profitability, healthy execution in the freight wagon segment during fiscal 2024 and presence of diversified order book providing medium term revenue visibility.

In fiscal 2024, topline increased 39% year-on-year to Rs 3,853 crore (fiscal 2023: Rs 2,781 crore, fiscal 2022 Rs 1,482 crore) because of healthy execution of large wagons order of Rs 7,800 crore for manufacture of 24,177 wagons received from Indian Railways in May 2022.

In year-to-date, TRSL has received projects including Vande Bharat order share (Rs 7,026 crore), Surat Metro order (Rs 858 crore), Ahmedabad Metro order (Rs 350 crore) and Wheelset manufacturing (TRSL share of Rs 6,300 crore, to be executed as Joint Venture [JV] with Ramakrishna Forgings Ltd, [RFL]}. This is on top of the large existing wagon order from the India Railways to be completed over fiscals 2025-2027.

The financial risk profile is supported by healthy net cash accrual of Rs 324 crore in fiscal 2024 (Rs 126 crore in fiscal 2023). This along with substantial reduction in debt resulted in net cash accrual to adjusted debt ratio improving to 4.89 times as on March 31, 2024 (from 0.50 time in fiscal 2023 and 0.82 time in fiscal 2022).

Any deterioration in operating performance due to delays in order execution or raw material (RM) supply constraints and delay in clearances will remain monitorable. Further any stretch in liquidity due to a longer working capital cycle, higher-than-expected debt-funded capex or incremental support towards group companies or overseas subsidiaries will also be monitorable.

The ratings continue to factor in the TRSL’s established market position in the wagon manufacturing industry and benefits derived from diversification into passenger rolling stock segment (Vande Bharat and various metro orders), along with an improved financial risk profile.

These strengths are partially offset by large working capital requirement, significant dependence on the Indian Railways for orders and exposure to volatility in RM prices.

Titagarh Rail Systems is a leading comprehensive mobility solution provider with presence in India and Italy. The company specializes in manufacturing semi high-speed trains, urban metros, passenger coaches, propulsion equipment, and a wide array of wagons, including specialized ones. It has capacity to manufacture 12,000 wagons, 300 coaches, and process around 30,000 tonnes of casting steel, per annum.

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