Texmaco Rail shares soar 6% as Q2 net profit nearly triples YoY, margins increase

Texmaco Rail & Engineering produces railway freight cars, hydro-mechanical equipment, loco components, steel bridge girders, castings, and pressure vessels, along with EPC contracts for railway tracks, signaling, electrification, and fare collection projects.

Shares of Texmaco Rail & Engineering Ltd jumped up to 6 percent after the railway firm reported stellar earnings for the quarter ended September 30, 2024. The company's net profit surged nearly triple, rising 195 percent year-on-year to Rs 74.1 crore.

Texmaco's revenue climbed 67 percent YoY to Rs 1,346 crore in Q2 FY25. The railway firm's earnings before interest, taxes, depreciation, and amortisation (EBITDA), rose 74 percent to Rs 132 crore and the Ebitda margin expanded to 9.8 percent from 9.5 percent in the same period last year.

At 1:14 pm, Texmaco Rail shares were trading over 4 percent higher at Rs 205.83 on the National Stock Exchange (NSE). The stock has risen around 18 percent so far this year, outperforming Nifty's returns of 12 percent.

In the past 12 months, the counter has gained 68 percent. In comparison, Nifty rose 28 percent during this period.

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Following the earnings announcement, the company said it successfully completed the acquisition of Jindal Rail Infrastructure Ltd. (JRIL) on September 3, 2024, and the company has now been renamed Texmaco West Rail Limited.

It was acquired for Rs 614 crore, and the transaction represented an FY24 EV/EBITDA multiple of 8.1x. This acquisition positions Texmaco as a market leader in the freight car industry.

During the first half of the year, Texmaco achieved the highest-ever freight car sales in its history, having sold 5,301 freight cars.

"With the acquisition of Jindal Rail & Infrastructure Ltd., we have attained a leadership position in the freight car manufacturing industry. During Q2 FY24, we delivered 2,927 freight cars, with 72% to Indian Railways and 28% to private customers and export markets," said Sudipta Mukherjee, Managing Director.

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