Stocks to buy or sell: Global brokerage sees strong growth in the Indian Railways’ rolling stock capex, but finds one stock worthy to capitalise on this trend: Titagarh Rail Systems.
Jefferies has initiated coverage on railway stocks and , with ‘Buy’ and ‘Underperform’ ratings, respectively. While both stocks trade at 40 times price to earnings (PE), the brokerage finds Jupiter Wagons too expensive for the growth differential. It has a target price of ₹810 for Titagarh, suggesting a 32% upside from the last closing price of ₹615, while for Jupiter Wagons, the global brokerage sees a 22% decline.
What could drive the growth in rolling stock?
Jefferies remains bullish on as it sees a 10% FY26-30E CAGR in sectoral spending, led by a 16% CAGR in passenger coach spending, vs 7% in FY20-26E, with a focus on safety, modernization, and Vande Bharat trainsets; and a 9% CAGR in locomotive spending, led by heavy haul for new freight corridors, offset by 5% CAGR in wagon spending vs 14% in FY20-26E.
The brokerage added that new high-speed rail (HSR) corridors provide growth visibility beyond FY30E as domestic trains can be 25-30% cheaper to procure. However, potential exports are an upside risk.
Additionally, India’s Metro rail network is expected to aid demand. The metro network expanded 4x in FY14-25 to ~1,000 km. Jefferies said it could double to 2,000 km by FY33E, driven by urbanisation and a strong project pipeline. “We see a 9% FY26-30 CAGR in Metro coach investments, similar to FY20-26E.”
Titagarh Rail stock outlook & trend
Against this backdrop, the brokerage said Titagarh will be a key beneficiary of rising passenger and metro coach demand.
Jefferies estimates 35% revenue and a 43% EPS CAGR in FY26-30 led by 14x rise in its passenger segment revenues over FY26E-30E, with a strong order book lending visibility, and ~1.4ppt margin improvement in the passenger segment as it moves up the technology value chain.
“We expect RoE to double from 6% in FY26E to 13% by FY28E and 16% by FY30E, led by rising plant utilisation. Our ₹810 PT values Titagarh’s core business at 25x Mar’28E EPS and the upcoming wheel JV at 2.5x investment value. We believe valuation multiples are justified relative to those of industrial companies with similar EPS growth,” it opined.
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.
Shares of Titagarh Rail Systems ended 19% down in 2025, snapping their 5-year winning run. So far in 2026, the railway stock is down 28%, recording losses in the first three months of the year.
Jupiter Wagons outlook
As for Jupiter Wagons, Jefferies estimates a 23% FY25-30E EPS CAGR for Jupiter as against 43% CAGR for Titagarh, given its higher exposure to wagons.
“With valuations at 40x FY27E PE, similar to Titagarh, we find Jupiter too expensive for the growth differential. Our ₹200 PT values JWL’s core business (ex-Wheel) at 20x Mar’28E EPS and its wheel manufacturing JV at 3.5x P/BV,” the global brokerage said.
Like Titagarh, Jupiter Wagons, too, recorded its first annual loss in six years in 2025 as it ended 2025 with a 32% loss. In the first few months of 2026, it is already down 24%.
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.