Does a new growth cycle await Jupiter Wagons and Titagarh Rail Systems?

Fig 1: Jupiter Wagons and Titagarh Rail Systems share price momentum 

From July 2024 onward, the stock prices of Jupiter and Titagarh fell 58.5% and 62.6%, respectively. (Source: Trading View)

However, from July 2024 onward, the stock prices of Jupiter and Titagarh fell 58.5% and 62.6%, respectively. The fall was largely triggered by the Lok Sabha elections, which slowed or delayed government orders and brought uncertainty around new tenders. After eight months of decline, momentum picked up from 13 March 2025, with stock prices rebounding 25.7% and 18.8%, respectively. This sudden surge after 52-week lows has caught investors’ attention. Is this the end of the downturn? Does a new growth cycle await these small caps?

About Jupiter Wagons and Titagarh Rail Systems

Jupiter Wagons (JWL) manufactures rail freight wagons and commercial vehicles. It also manufactures components such as couplers, brake discs, brake systems, wheels, axles, and wheel sets, among others. Its clients include the Indian Railways, Ministry of Defence, BEML, Alstom, Tata Motors, GE, American Railroads, and Volvo Eicher Motors.

Titagarh manufactures freight wagons as well as passenger coaches, metro trains, semi-high-speed trains, and transit and propulsion systems. It has a 25-30% market share in the wagon manufacturing industry. The company was a key beneficiary of the Atmanirbhar Bharat initiative as it won manufacturing and maintenance contracts for Vande Bharat trains. It is also the key supplier for Pune, Bangalore, Surat, and Ahmedabad Metros. The company is also involved in shipbuilding, bridge construction, and defence.

The above two companies have one thing in common — freight wagons manufacturing — which was the largest revenue contributor between FY22 and FY24.

Fig 2: Jupiter Wagons and Titagarh Rail Systems Sales from FY19 to 9MFY25

Source: Screener.in

Freight rail systems accounted for 86% of Jupiter Wagons and 93% of Titagarh’s FY24 revenue. However, the order book is now skewed towards passenger coaches, making Titagarh more attractive than Jupiter.

How does the order book look?

Jupiter Wagons’ order book stood at Rs 6,320 crore as of December 31, 2024, with a 50-50 blend of private clients and Indian Railways. The addition of two major orders in February — Rs 255 crore from Braithwaite & Co. for the supply of 9,140 wheelsets and Rs 600 crore from Ambuja Cements and ACC for rakes and wagons — increased its order book to Rs 7,000 crore.

Jupiter Wagons reported revenue and net profit growth of 15% and 18.4%, respectively in Q3FY25. These growth figures are slower than its 5-year compounded annual growth rate (CAGR) of 76% and 80%, respectively.

So far, there are no new orders from the Indian Railways. Even if the Indian Railways comes out with tenders, it won’t be of the 2022 magnitude of 70,000-80,000 coaches that made up for the three-year order book. The new tenders would be smaller but significant annual orders. Hence, Jupiter Wagons is focusing on capturing private clients and expects to maintain a 50-50 ratio of private and public order books.

Based on the execution of the current order book, Jupiter Wagons expects FY26 revenue to grow by 25% to Rs 5,000 crore. The management also expects to maintain its earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin of 14%.

Meanwhile, Titagarh’s order book stood at Rs 13,326 crore as of December 31, 2024, almost double the size of Jupiter Wagons. About 52.7% of this order book is for Vande Bharat, even though no new orders have come in for the passenger segment since October 2023.

It is because execution challenges hit the company due to a shortage of wheelsets in the Railway Board. This reduced its Q3FY25 revenue by 5% year-over-year (YoY) to Rs 902.2 crore and net profit by 16% to Rs 62.8 crore. This issue has extended the time for Titagarh’s first Vande Bharat delivery by nine months from June 2025 to March 2026.

The company is looking to resolve the wheelsets shortage by securing permits from the railways to use their wheelsets, which it is manufacturing in a joint venture with Ramkrishna Forgings.

Given the delay in execution, brokerage Nuvama has reduced its price target for Titagarh to Rs 1,197 from the earlier Rs 1,870. It has slashed its earnings per share (EPS) expectation by 10%, 12%, and 13% for FY25, FY26, and FY27.

However, the stock price of Jupiter and Titagarh will be driven by new orders. And for new orders, they were expecting a higher budget allocation for rail modernisation and development.

What does the Union Budget 2025-26 mean for the two?

The Union Budget 2025-26 maintained the overall rail budget at Rs 2.6 lakh crore, allocating Rs 57,693 crore for rolling stock (wagons), which includes 200 new Vande Bharat sleeper trains, 100 Amrit Bharat trains, 50 Namo Bharat rapid rail trains, and 17,500 general non-AC coaches.

The budget for rail safety is double that of rolling stock at Rs 1.14 lakh crore, with Rs 70,000-80,000 crore planned for the Kavach programme. The budget is more favourable for Titagarh Rail.

Fig 3: Titagarh Rail Systems Expected Tenders in FY26

Titagarh expects more order opportunities over the medium term. (Source: Titagarh Rail Systems Q3 FY25 Earnings Presentation)

Titagarh expects more order opportunities over the medium term. According to the publicly available government targets for railways, Titagarh sees

• Rs 35,000-40,000 crore market opportunity in freight wagons

• Rs 50,000-60,000 crore for Vande Bharat

• Rs 60,000-65,000 crore for other variations of Vande Bharat trains

• ~5000 metro rail coaches

Looking beyond wagons

Titagarh is looking to expand into Ship Building and Maritime Systems (SMS) and Safety and Signaling Systems (SSS), where the government has increased the budget.

It is looking to tap the government’s Rs 1 lakh crore budget on railway safety by focusing on three segments — rail-mounted vehicle systems, onboard systems, and electronic-oriented systems. Titagarh has a history of shipbuilding, having delivered specialised ships such as a Fast Patrol Vessel for the Indian Coast Guard and coastal research vessels ‘Sagar Tara’ and ‘Sagar Anveshika.’ In the next year and a half, it aims to form several strategic alliances and participate in tenders for the two new segments, with revenue likely coming in the second half of FY27 and FY28. Until then, passenger wagons will drive revenue growth.

Meanwhile, Jupiter Wagons is looking for new growth drivers in the electric light commercial vehicles (e-LCV) segment.

Jupiter acquired Log9’s technology and business assets for the Railway Battery and Electric Truck Battery Divisions. It started delivering Battery Energy Storage System (BESS) batteries to Indian Railways, and battery storage containers for data centres, railway coaches, signaling systems, and solar energy projects. It then integrated battery technology into commercial vehicles and launched its first e-LCV ‘TEZ’ in February, and has already secured orders for over 500 TEZ vehicles.

EVs are capital-intensive, but Jupiter has adopted an asset-light model wherein it is building the end-to-end EV ecosystem using shared resources through partnerships and joint ventures. Iṭ expects to earn Rs 100 crore in revenue from selling 1,000 e-LCVs in FY26.

Which is a better buy?

Generally, investors look at the price-to-earnings (PE) ratio to determine which stock has a better valuation. However, PE may not be a good indicator in this case, as both companies turned profitable only after the Indian Railways’ freight wagon orders kicked in in FY19 and FY21. Now with a slowdown in these orders, investors could look at the return on equity (ROE) and the future growth drivers that both offer.

Going by the returns, Jupiter Wagons has an edge over Titagarh in terms of ROE.

Fig 4: 3-Year Performance

Going by the returns, Jupiter Wagons has an edge over Titagarh in terms of ROE.

In terms of growth potential, Titagarh has a strong order book for the passenger segment, but temporary execution challenges have made brokerages reduce their price target. However, it has strong growth potential in the long term as the government invests in Metro, Vande Bharat, and rail safety.

Meanwhile, Jupiter Wagons is venturing into non-wagon opportunities to boost growth. It expects revenue to grow to Rs 8,000-10,000 crore by FY28, driven by growth in wheel, container, auto, and brake revenues.

Can the two companies revive growth with their new business segments? Only time will tell.

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information. 

Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.

Disclosure: The writer and her dependents do hold the stocks discussed in this article. 

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