Industry Overview: Indian railway is one of the largest railway networks worldwide under single management. Indian railway is India’s largest employer and is also one of India’s largest and most important industries with 2.6% of Indian GDP with Gross Traffic Receipt of the railway is ₹176834 cr. (Around $24 Billion) Indian railway operates 7566 locomotives, 37840 coaches, 7146 stations, 300 yards, 2300 Good shades, 700 repair shops, and a workforce of 1.53 million.
Further, for FY 2016-17, Gross Traffic Receipts were estimated at Rs 184,820 crore (US$ 27.4 billion), a growth of 10.1 percent. Indian Railways has appointed Ernst & Young (EY) as a consultant to discover its advertising potential, which is in line with the Railway Budget proposal of increasing non-fare earnings to over Rs 5,000 crore (US$ 741.2 million) in five years. Freight earnings stood at Rs 111,852 crore (US$ 16.58 billion) in FY 2015-16, growing 5.7 percent over 2014-15.
Freight loading stood at 1,107 million tonnes in FY 2015-16 compared to 1,095 million tonnes in 2014-15, indicating a growth of 1.1 percent. The plus point of the railway is that it is ideal for long-distance travel and movement of bulk commodities, apart from being energy efficient and economical mode of conveyance and transport. As India is the Seventh largest country per area, we need good transportation facilities for Coal, Cement, and agriculture products. The Government of India has focused on investing in railway infrastructure by making investor-friendly policies. In addition, it has moved to improve infrastructure by enabling Foreign Direct Investment (FDI) in railways.
Company overview: Titagarh Wagon, incorporated in 1997, is one of the leading manufacturers of Railway wagons. The company’s wagon products include hopper wagons, covered wagons, open-top wagons, flat container wagons, tank wagons, coaches, bogies, and special purpose wagons. The company is also manufacturing heavy Earthmoving equipment, including hydraulic excavators, crawler-mounted cranes, and heavy-duty and high-capacity EOT cranes for core sectors, as well as engages in manufacturing project jobs and provides product support. The company also manufactures defense equipment and is registered with the Ministry of defense. The company also operates in shipbuilding, breaking, Bailey Bridge marine engineering, mining equipment manufacturing, naval architecture, and ocean engineering.
SHAREHOLDING: BSE Data
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Future Prospects: before the Suresh Prabhu, the railway was going through a wrong time as there were no significant changes. Road transparent was a big competition for railway freight transporters. There were high costs as Ministry subsidized passenger tickets by increasing freight charges. Now, as it is changing, the Ministry is making different Freight Corridor. Also, the railway is started giving orders for new wagons, and in the business, Titagarh Wagon is one of the leading players.
Recent lousy performance by the company is mainly due to railway and its lack of Expenditure. But still, in that time also, management ensured that the company would survive. As the railway is now starting its Expenditure and aiming $500 Billion investment to increase the capacity in anticipated economic recovery, the company is looking attractive. Invest if it suits your Risk profile.
