Will these 2 Railway Stocks Continue to RALLY or TIME to book PROFITs now? #railwaystocks #rahuljain

Summary

This 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

• 🚂 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.
• 📈 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.
• 🔍 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.
• 📊 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.
• 💼 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.
• 🔄 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.
• 📉 Despite the strong performance, the video suggests that the current PE and PB ratios for Tagar Railway Systems are high, indicating potential overvaluation.
• 🌟 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.
• 📋 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.
• 💡 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.
• 📊 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

00:00

🚂 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.

05:01

📈 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.

10:03

🌟 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.

Keywords

💡Railway Stocks

Railway stocks refer to shares of companies that are involved in the railway industry, including manufacturing, maintenance, and operation of railway systems. In the video's context, the focus is on how investment in the railway sector has led to significant growth in the value of these stocks, with specific examples given such as Jupiter Wagon and Tagar Systems.

💡Capital Outlay

Capital outlay refers to the expenditure on acquiring, upgrading, or maintaining capital assets, such as infrastructure. In the script, it is mentioned that 2.40 lakh crores were provisioned for Railways in FY 2024, indicating a substantial financial commitment to the development of railway infrastructure.

💡Multibagger Returns

Multibagger returns describe a situation where an investment grows many times its original value. The video script highlights that under Ashani vnav's leadership, railway stocks have delivered multibagger returns, with some stocks like Jupiter Wagon and RVNL showing more than 1,000% returns in three years.

💡Order Book

An order book in a business context represents the total value of confirmed orders that a company has received but not yet delivered. The script emphasizes the importance of a large order book for Tagar Systems and Jupiter Wagon, which provides a strong indicator of future revenue and business growth.

💡Rolling Stock

Rolling stock encompasses the vehicles or trains that run on railway tracks, including locomotives, freight cars, and passenger coaches. The video discusses the contribution of passenger and freight rolling stock to the order books of the companies mentioned, indicating the demand for these types of vehicles.

💡CAPEX Injection

CAPEX, or capital expenditure, injection refers to funds allocated for purchasing, maintaining, or improving a company's fixed assets. The script mentions a capex injection into the railway sector, which has contributed to the rally in railway stocks, as it signifies investment in infrastructure and growth.

💡Profit Booking

Profit booking is when investors or promoters sell their shares to realize gains after the stock price has risen. The script notes that the promoters of Tagar Systems have done some profit booking, reducing their stake from 47% to 42%, which reflects their decision to take profits after the stock's significant appreciation.

💡PE Ratio

The PE ratio, or price-to-earnings ratio, is a valuation ratio calculated by dividing the market value per share by the earnings per share. It is used to determine if a stock is overvalued or undervalued. The video discusses the PE ratio of Tagar Systems and Jupiter Wagon, noting that the stocks are trading at a high PE, indicating investor optimism about future earnings growth.

💡PB Ratio

The PB ratio, or price-to-book ratio, compares a firm's market value to its book value. A high PB ratio may suggest that a stock is overvalued. The script mentions the PB ratios of the railway stocks, noting that they are trading at high levels, which could imply that investors are expecting the companies to grow their net assets significantly.

💡Qualified Institutional Placement (QIP)

A QIP is a method of raising funds from qualified institutional investors by issuing shares or convertible securities. In the script, Jupiter Wagon's recent QIP of 1,000 crores is mentioned, which is intended to finance the expansion of their business, particularly the acquisition and development of Bona Trans India Private Limited.

💡Net Debt Free

A company is considered net debt free when it has no outstanding long-term or short-term debt, or when its liquid assets exceed its total liabilities. The script points out that Jupiter Wagon is a net debt-free company, which is a positive financial indicator, suggesting financial stability and the ability to invest in growth opportunities without debt burden.

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

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see you in my next video Until then keep

rocking