3,066% rally in five years! Experts see nearly 30% upside in this multibagger railway stock in 3-6 months

Multibagger stock: Shares of railway wagon manufacturer Titagarh Rail Systems have hit a pause after a significant one-way rally over the last five years. The multibagger stock has fallen 57% from its all-time high level of ₹1,896.50 recorded in June 2024 amid a slowdown in the company's growth momentum.

Industry wide challenges such as supply chain disruptions, fluctuating raw material costs and slower execution of orders created hurdles for the company. This resulted in just 2% growth in its revenue to ₹2,862 crore during the first nine months of the financial year 2024-2025 (9MFY25). Meanwhile, PAT also grew in single digits to the tune of 6% year-on-year to ₹225 crore in the period, and margins took a hit on higher input costs.

Going ahead, however, analysts believe the railway sector stock has a strong scope of rebound led by a host of positive fundamental and technical factors.

According to a report by Geojit Financial Services, multibagger stock Titagarh Rail Systems can touch ₹1,050 in the next 3-6 months, signaling a 29% upside from its last closing price of ₹815.65 on the BSE. The scrip has gained 3,066% in the last five years.

Why are analysts bullish on Titagarh Rail Systems?

- Fundamental View

Geojit Financial Services believes the company has a strong revenue visibility and sustained growth potential as signified by its strong order book which stands at ₹25,333 crore, representing 6.2x FY25E sales.

During 9MFY25, Titagarh secured orders worth ₹1,106 crore across diverse business verticals, covering ~13,689 wagons and 1,589 Metro and Vande Bharat coaches.

The newly introduced verticals, Signaling and Safety Systems, along with Shipbuilding & Maritime Systems, are expected to start contributing to revenue from FY26, driven by increasing demand for advanced rail systems and maritime solutions, said the brokerage.

The recent correction has also made the valuations attractive as the stock is currently trading at a 1-year forward P/E of 25x, which is lower than the 3-year average P/E of 27x and slightly above the 5-year average P/E of 24x.

"The medium-term growth prospects remain promising, fueled by robust demand for Passenger wagons, Metro projects, and Vande Bharat production led by strong order inflows and expanding manufacturing capabilities, which are expected to aid financial performance and valuations," the brokerage said.

- Technical View

Analysts at Geojit said the stock has found support around a horizontal support line on the daily chart, which coincides with the 200-week exponential moving average (EMA), both positioned around the 700 level.

"The stock has reclaimed its 21-DMA and broken above a downward-sloping trendline on the daily chart, supported by robust volume activity over the past few days. The 14-day RSI is currently around 55–56, trending at a three-month high, accompanied by a positive MACD crossover trending in an upward direction," it added, recommending a buy on the stock between ₹795-825 for a target price of ₹1,050. It recommends a stop loss of ₹728.

According to Om Ghawalkar, Market Analyst, Share.Market, the stock is currently testing a crucial resistance level at ₹834 but has yet to break through.

"The next key resistance stands at ₹883. On the downside, immediate support is at ₹777, with the next support level at ₹733," said Ghawalkar.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.