Will these 2 Railway Stocks Continue to RALLY or TIME to book PROFITs now? #railwaystocks #rahuljain
Summary
TLDRThis video delves into the booming railway sector, highlighting significant capital investments and government initiatives driving stock performance. It focuses on two standout stocks, Tagara Railway Systems and Jupiter Wagon Limited, showcasing their impressive returns and growth trajectories. The presenter examines their financials, order books, and strategic moves, such as acquisitions, to provide a data-driven analysis. The video also discusses valuations, investor sentiment, and the potential for these stocks to continue their bull run, offering viewers a comprehensive insight into the railway stocks' future prospects.
Takeaways
- ๐ The video discusses the significant capital inflow into the railway sector, with 2.40 lakh crores allocated for FY 2024 and major railway corridor programs announced in the 2025 interim budget.
- ๐ Railway stocks have seen massive rallies in the last 2-3 years, with some stocks like Jupyter Wagon and RVNL giving over 1,000% returns.
- ๐ The first stock analyzed is Tagar Railway Systems, which has shown a 247% return in the last year and a significant rally in FY 23 and 24, backed by strong fundamentals.
- ๐ Tagar Railway Systems reported its first net profit in FY 2023, which doubled in FY 2024, with revenues growing from 1,400 CR to 2700 CR and further by 40% in the next fiscal year.
- ๐ผ The company has a substantial order book of 14,000 crores, with a second order book of 13,300 crores, indicating strong revenue visibility for the next few years.
- ๐ Tagar Railway Systems is planning a capex of 1,000 crores for capacity building and has a healthy balance sheet with a low debt-to-equity ratio.
- ๐ Despite the strong performance, the video suggests that the current PE and PB ratios for Tagar Railway Systems are high, indicating potential overvaluation.
- ๐ The second stock featured is Jupiter Wagon Limited, which has seen a 400% return in the last year and a 4,000% increase over five years.
- ๐ Jupiter Wagon has a smaller order book of 7,000 crores compared to Tagar, with a significant portion coming from private players, suggesting less risk.
- ๐ก The company's recent acquisition of Bona Trans India Pvt Ltd and plans to increase wheel set production could add substantial revenue to their order book.
- ๐ Jupiter Wagon is debt-free and has shown consistent profit growth, but it is trading at a higher PE and PB ratio compared to industry standards.
Q & A
What is the main focus of the video?
-The video focuses on discussing two Railway stocks that have seen significant growth due to increased capital investment in the railway sector in recent years.
How much capital outlay was provisioned for Railways in FY 2024 and what was announced in the 2025 interim budget?
-In FY 2024, 2.40 lakh crores were provisioned for Railways. In the 2025 interim budget, three Railway corridors were announced as part of major economic corridor programs.
What is the performance of Railway stocks under Ashani vnav's leadership in the last three years?
-Under Ashani vnav's leadership, Railway stocks have given multibagger returns, with many of them providing more than 1,000% returns in the last three years.
What is the stock performance of Tagar Railway Systems in the last one year and five years?
-In the last one year, Tagar Railway Systems has given close to 247% returns, and in the last five years, it has grown from a 61 rupee stock to a 1,500 rupee level.
What was the financial performance of Tagar Systems up until March 2022?
-Up until March 2022, Tagar Systems was making losses in all fiscal years except for one, where it reported a net profit for the fiscal year 2023.
What is the size of the order book for Tagar Railway Systems and what does it indicate about the company's future revenue?
-Tagar Railway Systems has an order book of around 14,000 crores, which is almost four times the company's revenue in FY 2023-24, indicating strong revenue visibility for the company.
What is the significance of the joint venture between V bhat with B in Tagar Railway Systems' order book?
-The joint venture between V bhat with B contributes around 53% to Tagar Railway Systems' order book, indicating a significant business collaboration.
What is the total order book size when combining both order books of Tagar Railway Systems?
-The combined order book size of Tagar Railway Systems is around 28,000 crores, which is 7 to 8 times their FY 24 revenues.
How has the PE and PB ratio of Tagar Railway Systems changed in the last three years and what does it suggest about the stock's valuation?
-In the last three years, the PE ratio has increased from a median of around 37 to around 70, and the PB ratio has increased from a median of 2.7 to around 9, suggesting that the stock is currently trading at a high valuation.
What is the performance of Jupiter Wagon Limited in the last one year and five years?
-In the last one year, Jupiter Wagon Limited has given close to 400% returns, and in the last five years, it has grown from 17 rupees per share to almost 700 rupees per share.
What is the composition of Jupiter Wagon Limited's order book and how does it compare to Tagar Systems'?
-Jupiter Wagon Limited has an order book of roughly 7,000 crores, with 60% to 70% coming from private players, making it slightly less risky compared to Tagar Systems, which has a larger order book but mainly contributed by the government sector.
What is the recent acquisition by Jupiter Wagon Limited and how does it impact the company's revenue?
-Jupiter Wagon Limited recently acquired Bona Trans India Private Limited, which manufactures wheel sets for Railway stocks. This acquisition is expected to add around 400 crores of revenues by producing 14,000 to 18,000 wheel sets annually.
What are the current PE and PB ratios of Jupiter Wagon Limited and how do they compare to industry standards?
-Jupiter Wagon Limited is currently trading at a higher PE and PB ratio compared to industry standards, with an all-time high PE ratio of around 89 and a PB ratio of 18.
Outlines
๐ Railway Stocks Surge: Capital Injection and Multibagger Returns
The video discusses the significant capital inflow into the railway sector over the past few years, resulting in substantial rallies for railway stocks. The speaker highlights the government's provision of 2.40 lakh crores for Railways in FY 2024 and the announcement of three major railway corridors in the 2025 interim budget. The focus is on two stocks, TATA Motors and RVNL, which have seen over 1,000% returns in the last three years. The first stock, TATA Motors, has shown remarkable growth, moving from losses to substantial profits, particularly in FY 2023 and 2024. The company's strong fundamentals, bolstered by a substantial order book of 14,000 crores, indicate a promising future. The second order book, a joint venture with BHEL, and wheel set production with Ramakrishna Forgings, adds to the company's robust outlook. The speaker emphasizes the importance of the order book size relative to the company's revenue and the potential for the stock to reach new heights in the coming years.
๐ TATA Motors' Growth and Valuation Analysis
This paragraph delves deeper into TATA Motors' financial performance, noting the company's transition from losses to profitability, especially in FY 2023 and 2024. The company's revenue saw a significant increase, doubling from 1,400 crores to 2,700 crores in FY 2023 and growing by 40% in FY 2024. The speaker discusses the company's order books, which are four times the size of its revenue, indicating strong revenue visibility and a reason for investor interest. The planned capex of 1,000 crores over the next two years and the shareholding pattern, which shows promoter profit booking and increased institutional interest, are also highlighted. However, the speaker points out that the company's PE and PB ratios are high, suggesting that the stock might be overvalued and should be considered for purchase when these ratios are lower.
๐ Jupiter Wagons Limited: Exceptional Returns and Future Prospects
The final paragraph shifts focus to Jupiter Wagons Limited, another stock that has delivered exceptional returns, increasing by 400% in one year and 4,000% over five years. The company's growth is attributed to a turnaround in profitability from FY 2021 onwards, with revenues and profits showing impressive compound annual growth rates. The speaker emphasizes the company's robust order book of 7,000 crores, which is predominantly from private players, offering a contrast to TATA Motors' government-dominated order book. The acquisition of Bona Trans India Pvt Ltd, a manufacturer of railway wheel sets, and the subsequent investment to increase production capacity, are highlighted as significant growth drivers. The company's net debt-free status and high valuation metrics are also discussed, with the speaker noting that the stock is trading at an all-time high in terms of PE and PB ratios.
Mindmap
Keywords
๐กRailway Stocks
๐กCapital Outlay
๐กMultibagger Returns
๐กOrder Book
๐กRolling Stock
๐กCAPEX Injection
๐กProfit Booking
๐กPE Ratio
๐กPB Ratio
๐กQualified Institutional Placement (QIP)
๐กNet Debt Free
Highlights
Railway stocks have experienced massive rallies due to significant capital inflow into the sector over the past 2-3 years.
In FY 2024, 2.40 lakh crores were provisioned for Railways, and in the 2025 interim budget, three major economic Railway Corridor programs were announced.
40,000 normal rail bogies are planned to be converted to V bhat standards, indicating a substantial capex injection into the railway sector.
Under Ashani vnav's leadership, Railway stocks have delivered multibagger returns, with some exceeding 1,000% in the last three years.
Tega Railway Systems has seen its stock price increase from 61 rupees to 1,500 rupees in five years, with a significant rally in FY 23 and 24.
Tega Railway Systems reported its first net profit in FY 2023, which doubled to 286 crores in FY 2024, a strong indicator of financial growth.
The company's order book stands at around 14,000 crores, four times the revenue of FY24, offering substantial revenue visibility.
Passenger and Freight Rolling Stock contribute significantly to Tega Railway Systems' order book.
Tega Railway Systems plans a 1,000-crore capex investment over the next two years to expand capacity.
Promoter stake has decreased from 47% to 42% due to profit booking, while FII and DII stakes have increased.
Jupiter Wagons Limited has provided 400% returns in one year and a staggering 4,000% growth over five years.
Jupiter Wagons has a strong order book of 7,000 crores, with a majority from private players, indicating less risk.
The acquisition of Bona Trans India Pvt Ltd by Jupiter Wagons is expected to add significant revenue through wheel set production.
Jupiter Wagons is a net debt-free company, which is a positive sign for investors.
Both Tega Railway Systems and Jupiter Wagons are trading at high PE and PB ratios, reflecting investor confidence despite high valuations.
The video provides a data-driven analysis of the two railway stocks, offering insights into their growth potential and financial health.
The speaker encourages viewers to subscribe for more in-depth analysis of stocks, mutual funds, and other assets.
Transcripts
hi friends this is a very very important
video because in this video I'm going to
cover two Railway stocks money flowing
into the railway sector in the last 2
to3 years has caused massive rallies in
the railway stocks in FY 2024 2.40 lakh
crores were provisioned for Railways a
capital outlay of
2.4 lakh crores and in 2025 interim
budget three Railway corridors were
announced
Railways three major economic cor
Railway Corridor programs
will be implemented
40,000 normal rail
Bogies will be converted to V bhat
standards this capex injection into the
railway sector has caused this massive
rally have a look at my screen and what
you are going to see is how Railway
stocks have performed under different
Railway ministers leadership and if you
look at Ashani vnav last three years of
his leadership Railway stocks have given
multibagger returns majority of them
have given multibagger returns have a
look at for example jupyter wagons rvnl
Target Railway systems they have given
more than 1,000% returns in last 3 years
so in this video I'm going to pick up
two stocks and whatever I speak will be
data driven and you're not going to find
this content elsewhere so consider
subscribing with that let's move to our
stock number one which is taga Railway
systems if you see my screen you will
notice that in the last one year this
stock has given close to 247 returns and
if you look at Last 5 Years you will
notice that a 61 rupe stock has gone and
become now 1,500 rupees level of a stock
interesting point to note is that FY 23
and 24 is where the major rally has
happened for this stock and this is
pretty much backed by their fundamentals
have a look at my screen and you will
see the pnl statement of tager systems
and you will notice that up until March
2022 the company was making losses
except one year which is fiscal year
2023 company gave positive net profits
other than that if you look at all these
years they have been making losses it
was only fiscal year 2023 the first time
they gave a net profit of 126 crores
that has gone up to 286 crores almost
doubled in fiscal year 2024 if you look
at the top line or the revenues in
fiscal year 2023 the revenues doubled
from 1,400 CR to 2700 CR and in fiscal
year 2024 the top line has grown by
almost 40% will this growth continue can
this stock become 5,000 rupees per share
kind of a stock in the next 2 to 3 years
or four years for this we are going to
Deep dive into some of the Tailwind
factors that the stock is facing right
now first point I want you to understand
is the order book they have two order
books actually what you see on my screen
is order book number one which is around
14,000 crores and just to put this in
some context in f524 the company did
3,800 CR so this is almost four times
the order book that they're sitting on
right now and if you see the breakup of
this order book you will see that the
passenger Rolling Stock is going to
contribute around 46% while the Freight
rolling stock is going to contribute
around 54% what is a Rolling Stock
Rolling Stock actually means the vehicle
or the train or the rail that moves on
the railway tracks but there are lot of
components of every train so for example
here there is the battery box there is
the bogey there is the condenser there
is a compressor and there is a wheel set
I'll speak about wheel set a lot in this
video but the point is that the company
is sitting at an order book of 14,000
crores which is the order book number
one second order book that you see on my
screen is also around similar size
13,300 rupees 53% of this is a joint
venture with B another stock that I
definitely want to do a video let me
know in the comments if you would like
me to create a full dedicated video on B
extremely important stock to consider
but anyways coming back V bhat with B is
a joint venture which is going to
contribute around 53% in this order book
and the wheel set production with
ramakrishna forgings contributes around
47% into this order book if you put this
order book together order book number
one and order book number two we are
going to see that their total order book
if I talk about it is around 28,000
crores which is almost 7 to 8 times of
their FY 24 revenues now please tell me
that out of the 28,000 crores if in the
next 3 to 4 years if they are able to
execute even the 50% of this order book
it is going to be a lot of revenues that
we can see in the next few years so this
is point number one that you need to
understand which is giving them a lot of
visibility of revenues and that is why
investors have been buying this stock
mainly because there's a good visibility
of upcoming revenues in the next 3 to
four years also if you look at my screen
you will see that the company plans to
invest around 1,000 crores of capex in
the next 2 years because they want to
build the capacity if you look at the
share holding pattern you will notice
that the promoters have done some profit
booking in the last 2 to three quarters
the stake has gone down from 47% to now
42% as of March 2024 if you look at the
FIS and diis both in the last three
quarters have up the game and have
bought the stock and that explains to me
the stock price is going up in the last
three quarters because of there have
been a heavy buying in this stock if you
look at the balance sheet of this
company you will see that from a debt
perspective it is 166 right now not a
huge debt at all in fact the company is
sitting at very good reserves if you
look at the valuation tagar Railway
systems PE ratio and the PB ratio if you
look at other stocks as well it is not
looking very high but from industry
perspective yes the company has been
enjoying a premium if you compare the
valuation from a jupyter wagon
perspective they're slightly on the
lower side but overall from industry PB
perspective it is trading at a high
level because of the visibility into
revenues and profitability and therefore
investors are buying this stock now if
you look at the last 3 years p ratio you
will see the median PE is around 37
right now the stock is trading at around
70 and in my view this is very very high
level it may continue to go up but in my
view such stocks could be bought at
levels which are like low PE for example
here it was at 40 42 these are the good
levels to buy these stocks right now it
is very high also if you look at the PB
chart in the last 3 years the median PB
is around 2.7 right now it is around 9
so very very high again in my view these
stock should be accumulated when the PE
Ratio and PB ratio is slightly calmed
down not at very very high level but I
think overall I see very strong Revenue
visibility very strong profitability
visibility capex enhancement going on
overall the stock is still in a massive
bull run again not a stock
recommendation I've given you data
bagged analysis about this stock and if
you like this hit the like button let me
know in the comments a simple thank you
you can also consider subscribing to my
YouTube member Community where I post
in-depth analysis of stocks mutual funds
and various other assets that might help
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comments moving to stock number two
which is Jupiter wagons limited have a
look at my screen and you will see that
in the last one year stock has given
close to 400% returns and if you look at
the Last 5 Years stock has gone up by
almost 4,000% it has gone from 17 rupees
per share to almost 700 rupees per share
level now what really amazes me about
Jupiter wagon is that if you look at my
screen you will see FIS and diis only
have very minority stake in the company
around 2% by F and around 2% as well in
diis which is beyond my imagination to
be honest because the fact I'm going to
share about this company shows me a
massive growth coming up but before I do
that what has been driving the growth in
this company have a look at my screen
and you will see that up until 2020
fiscal year 2020 the company was making
losses almost in every year the company
was making losses except in year 2019
and in 2013 it has been making losses
but from 21 onwards the company has been
consistently making profits and have
been almost growing their profits and
the chart that you see now now
beautifully summarizes their growth
because in the last 3 years if you look
at it the revenues or the top line has
grown up by cagr of around 54% and more
importantly the profits have grown up by
around 84% cagr basis now coming to the
second hypercritical point about this
stock is the order book so if I show you
the company as of March 2024 is sitting
on a order book of roughly 7,000 cres
now compare Jupiter wagon's order book
which is around 7,000 CR to tagart
systems order book which was around
28,000 CR so almost four times order
book is what tagar systems have if you
compare this with the jupyter wagon both
have a very similar Revenue profile as
well taga did around 3,800 crores while
Jupiter wagon has done 3,600 crores but
the notable difference in Jupiter
wagon's order book is that majority of
this order book which is 60% to 70% is
coming from the private players while in
case of tager systems it is mainly
contributed by the government sector so
this is a very big difference because
the Indian government
policies may have big difference so from
that perspective Jupiter wagon is
slightly less riskier but from an order
book perspective tager systems has four
times of the order book and if you put
all of this together company is likely
to cross 5,000 CR maybe 5,500 cres of
Revenue in FY 2025 but another Tailwind
that this company is enjoying right now
is that the company recently acquired
another company called Bona trans India
private limited for a consideration of
27,000 lakh rupees now Bona trans India
pvt limited basically manufactures the
wheel set of the Railway stocks and
Jupiter wagon is putting lot of money
into Bona trans India limited because
they want to get to 14,000 to 18,000 of
Wheel sets to be produced in a year that
is going to be around 400 cres of
revenues getting added into this book
and that's why precisely Jupiter wagon
very recently raised a qip which is a
qualified institutional placement of
1,000 cres meaning they raised 1,000
rupees because majority of this money
they are going to put in the Bon trans
limited company lastly Jupiter wagon is
a net debt free company now if you look
at the valuation of jupyter wagons you
will note that it is trading at a higher
p and higher PB than other companies
also from industry perspective almost
twice the PE level almost three times
the PB level from a tager systems
perspective if you compare Jupiter wagon
is trading at a higher p and PB right
now at the time of recording this video
also if you look at the P trend of
Jupiter Wagon in the last 3 years you
will see that right now it is all-time
high Crossing around 89 and if you look
at the trend line of PB ratio as well it
is trading at a very high PB of 18 right
now so I've shared a lot of analysis
about these two stocks let me know in
the comments any other railway stocks
you want me to cover and I'll be happy
to shoot another video covering few more
Railway stocks if you like also let me
know if you want me to create any other
stocks for example b or H many other PSU
stocks you would like me to cover let me
know in the comments I'll be happy to
cover and hopefully this video has given
you lot of insights about the two stocks
that I spoke about and if you like this
datab back analysis request you to hit
the like button let me know in the
comments a simple thank you it will
motivate me to bring lot of content for
you at zero cost lastly you can also
consider subscribing to my YouTube
member Community because I share
in-depth analysis of stocks mutual funds
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find very very helpful with that I'll
see you in my next video Until then keep
rocking
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