Titagarh Rail Systems shares surged around 16% in just two sessions following international brokerage Jefferies' 'Buy' rating, citing strong growth prospects in passenger coaches and metro rail expansion. According to The Economic Times, the stock has jumped around 22% in the past one week, though it remains down 20% in 2026 so far. In the longer term, the shares have rallied 143% in three years and a whopping 1,331% in five years. Titagarh Rail shares ended 19% down in 2025, snapping their 5-year winning run, and are down 28% so far in 2026, recording losses in the first three months of the year. The brokerage's ₹810 target values Titagarh's core business at 25 times March 2028 estimated earnings and its upcoming wheel joint venture at 2.5 times investment value, implying a 27% upside potential from the previous closing price of ₹639.35.
Jefferies expects India's rolling stock capital expenditure to grow at a 10% compound annual rate over FY26–30, broadly in line with the 12% CAGR seen in FY20–26. As reported by The Economic Times, the brokerage estimates a 10% FY26-30E CAGR in Indian Railways rolling stock spending, led by a 16% CAGR in passenger coach spending and a 9% CAGR in locomotive spending, offset by weak wagon growth. The brokerage expects wagons to grow at a 5% CAGR during this period as it expects cargo growth of only 6% compared to the Indian Railways' target of 16%. Competitive intensity remains low in the urban transit space with only three active players, as technology and the mandatory 75% domestic procurement norms act as entry barriers. India's Metro rail network expanded 4 times between FY14 and FY25 to approximately 1,000 km, and it expects that to double to 2,000 km by FY33, driven by urbanisation and a strong project pipeline.
On Titagarh, Jefferies argues that the company is poised to be a key beneficiary of rising passenger and metro coach demand. According to The Economic Times, the brokerage estimates a 35% revenue CAGR and 43% EPS CAGR over FY26–30, driven by a 14x rise in passenger rail systems revenues and margin improvement as it moves up the technology value chain. The passenger rail systems order book of ₹108 billion at 42x FY25 PRS sales provides strong visibility, with the share of passenger revenues projected to rise from 7% in FY25 to 63% by FY28. Jefferies expects the passenger segment margin to improve by 1.4 percentage points as the company moves higher in the technology value chain. The brokerage also expects Titagarh's Return on Equity (RoE) to double from 6% in FY26 to 13% by FY28 and to 16% by FY30, led by higher plant utilization. Key risks flagged for Titagarh include limited wagon business visibility once the current order book is exhausted, execution challenges, and the possible entry of Chinese players in passenger coaches.
In contrast to Titagarh, Jefferies believes growth at Jupiter Wagons will slow as its business remains heavily skewed towards lower-growth freight. As reported by The Economic Times, the brokerage estimates a 23% EPS CAGR for Jupiter over FY26–30, well below Titagarh's 43%, as wagons are expected to account for 60% or more of sales even by FY28. With valuations at 40x FY27E PE, Jefferies finds Jupiter too expensive for the growth differential, assigning an Underperform rating and a ₹200 target. The new wheel manufacturing plant is also expected to contribute meaningfully only post FY28. Jupiter Wagons recorded its first annual loss in six years in 2025 as it ended 2025 with a 32% loss, and in the first few months of 2026, it is already down 24%. Jupiter Wagons is valued at 20 times its March 2028 EPS for the core business and at 3.5 times price-to-book value for its wheel manufacturing JV. The brokerage sees Jupiter's EPS growth to be slower than Titagarh, given the former's higher exposure to the wagons business.
Jefferies' view is that India's rail capex cycle remains intact, but investors should prefer Titagarh given its stronger earnings trajectory, improving return ratios, and greater exposure to structurally faster-growing passenger and metro segments. According to The Economic Times, the brokerage's ₹810 target values Titagarh's core business at 25 times March 2028 estimated earnings and its upcoming wheel joint venture at 2.5 times investment value. The brokerage notes that valuation multiples are justified relative to those of industrial companies with similar EPS growth. Titagarh Rail shares are trading 0.6% lower at ₹611.55 on Monday, while Jupiter Wagons shares are down 1.3% at ₹253.1. Among the key risks are limited wagon business visibility post-exhaustion of the current order book, weak execution and entry of Chinese players into passenger coaches.
