40% Dividend: Not IRFC, Or RVNL, But Midcap Railway Wagon Stock Is Advised To BUY For Rs 1,890 Target; Who?

A midcap railway wagon stock has turned ex-dividend for a 40% dividend payout this week. The stock is a multibagger with gains of nearly 109% on year-on-year, and up by 3,798% in 5 years on BSE. This stock is neither IRFC nor RVNL which are top large caps under railway PSU, but instead Titagarh Rail Systems.

After turning ex-dividend, Titagarh's share price ended at Rs 1436.30 apiece on BSE, after market hours of August 21 with a market cap of Rs 19,343.19 crore. The stock's YTD performance is upside by 38%.

Titagarh turned ex-dividend on August 20, for its final dividend of 40% worth Rs 0.80 per share for FY24. This is higher compared to the final dividend payout of 25% and 15% in FY23 and FY22.

August 20 is also the record date to determine eligible shareholders for the final dividend. Hence, only those investors will be eligible who are holding Titagarh shares in their demat accounts by the end of August 20, 2024.

BUY Titagarh Rail Systems Share?

In its latest report, Prabhudas Lilladher said, "Titagarh Rail has witnessed a decent correction from the all-time high level of the 1898 zone and has taken support near the 50% retracement level of 1340 and the 100 period MA of 1300 level is also positioned in that zone."

Further, the brokerage added that the RSI has corrected quite significantly from the highly overbought zone and currently is well-placed to signal a buy with a positive trend reversal confirmed.

Also, with much upside potential visible and chart looking attractive, the stock is anticipated to carry on with the positive move further ahead, it added.

On the valuation, Prabhudas said, "We suggest buying the stock for an upside positional target of 1740 - 1890 while keeping the stop loss at 1270 levels."

Fundamentals Of Titagarh Rail Systems Stock:

As per Trendlyne data, the following are the key fundamentals:

- Stock Price rose 125.83% and outperformed its sector by 59.05% in the past year.

- Debt to Equity Ratio of 0.03 is less than 1 and healthy. This implies that its assets are financed mainly through equity.

- Mutual Fund Holding increased by 0.61% in the last quarter to 11.44.

- Interest Coverage Ratio is 6.69, higher than 1.5. This means that it can meet its interest payments comfortably with its earnings (EBIT).

- Price to Earning Ratio is 66.39, higher than its sector PE ratio of 35.82.

- Return on Equity(ROE) for the last financial year was 12.89%, in the normal range of 10% to 20%.

- Promoter Share Holding decreased by 2% in the most recent quarter to 40.46%.

- Promoter Pledges stayed the same in the last quarter at 0.06%.

About Titagarh Rail Systems:

Titagarh Rail Systems is a leading comprehensive mobility solution provider with a strong presence in India and Italy. With state-of-the-art factories in both countries, the company is committed to meeting the diverse requirements of passenger and freight rolling stock. At Titagarh, the company specializes in crafting cutting-edge transportation solutions, including semi-high-speed trains, urban metros, passenger coaches, propulsion systems, and a wide array of wagons, including specialized ones.