Jefferies Turns Constructive on Indian Railways, Favors Titagarh over Jupiter Wagons

Jefferies has initiated coverage on India’s railway space with a positive outlook, citing a sustained capex upcycle — 10% CAGR in rolling stock investment expected between FY26–FY30. Passenger and metro coaches are the growth engines, projected to grow at 9–16% CAGR, driven by Vande Bharat expansion, urban transit development, and safety modernisation. In contrast, wagon demand is expected to grow modestly at 5% CAGR, reflecting slower cargo growth. Titagarh Rail Systems is the top pick, rated ‘Buy’ with a target of ₹810 (32% upside), as it stands to gain from its strong positioning in high-growth passenger rolling stock. With a robust order book, rising capacity utilisation, and shift toward higher-margin metro and intercity coaches, Jefferies expects 43% EPS CAGR through FY30 and meaningful margin expansion. In contrast, Jupiter Wagons is rated ‘Underperform’ with a target of ₹200 (22% downside), despite an expected 23% EPS CAGR. Its heavier exposure to slower-growing wagons and stretched valuation — trading at 40x FY27E P/E, similar to Titagarh — makes it less attractive. Any upside hinges on a revival in freight capex or improved performance from its wheel JV. While other players like IRCON and HBL Power Systems benefit from infrastructure and electrification themes, Jefferies’ analysis underscores a clear preference for companies leveraged to passenger mobility transformation. With Indian Railways prioritising modernisation, integrated manufacturers like Titagarh are better positioned for structural growth than commodity-focused wagon makers.