Buy Titagarh Wagons; target of Rs 157: Edelweiss

Edelweiss' research report on Titagarh Wagons

Titagarh Wagons’ (TWL) strong show sustained in Q4FY17 as well with consolidated revenue, at INR6.6bn, jumping 107% YoY largely on account of healthy performance of the Italian coach subsidiary Firema. However, lower other income led to muted PAT growth. Cimmco (subsidiary) also performed well on revenue as well as profitability fronts.

Outlook

However, order inflows have not kept pace with execution, resulting in TWL Group’s order book declining to INR 22.5bn (INR 27.0bn at FY16 end). We believe order intake will be key catalyst going ahead. Maintain ‘BUY’ with SOTP-based target price of INR 157.