TITAGARH - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | TITAGARH | Market Cap | 10,713 Cr. | Current Price | 795 ₹ | High / Low | 974 ₹ |
| Stock P/E | 44.0 | Book Value | 193 ₹ | Dividend Yield | 0.13 % | ROCE | 17.5 % |
| ROE | 12.8 % | Face Value | 2.00 ₹ | DMA 50 | 821 ₹ | DMA 200 | 872 ₹ |
| Chg in FII Hold | 1.10 % | Chg in DII Hold | -0.17 % | PAT Qtr | 51.8 Cr. | PAT Prev Qtr | 44.9 Cr. |
| RSI | 45.9 | MACD | -9.09 | Volume | 4,85,553 | Avg Vol 1Wk | 10,51,342 |
| Low price | 655 ₹ | High price | 974 ₹ | PEG Ratio | 0.59 | Debt to equity | 0.25 |
| 52w Index | 43.9 % | Qtr Profit Var | -42.5 % | EPS | 17.6 ₹ | Industry PE | 50.6 |
📊 Analysis: Titagarh shows moderate fundamentals with ROE at 12.8% and ROCE at 17.5%, reflecting decent efficiency. EPS of 17.6 ₹ supports earnings visibility, while debt-to-equity ratio of 0.25 indicates manageable leverage. Dividend yield of 0.13% is negligible. The stock trades at a P/E of 44, slightly below industry average (50.6), suggesting fair valuation. PEG ratio of 0.59 highlights growth potential at a reasonable price. Technically, the stock is trading below both 50 DMA (821 ₹) and 200 DMA (872 ₹), showing medium-term weakness. RSI at 45.9 and negative MACD (-9.09) confirm neutral to bearish momentum. Quarterly PAT improved sequentially (51.8 Cr. vs 44.9 Cr.), but profit variation (-42.5%) indicates volatility.
💡 Entry Zone: Ideal accumulation range is between 740 ₹ – 780 ₹, closer to support levels and valuation comfort.
📈 Exit / Holding Strategy: Existing holders can maintain positions for growth potential. Exit strategy: partial profit booking near 950–970 ₹ resistance. Holding period: 2–4 years, contingent on earnings consistency and improvement in ROE/ROCE.
Positive
- ROCE (17.5%) and ROE (12.8%) show decent efficiency.
- PEG ratio of 0.59 indicates growth potential at fair valuation.
- Debt-to-equity ratio of 0.25 reflects manageable leverage.
- Sequential PAT improvement (51.8 Cr. vs 44.9 Cr.).
- FII holdings increased (+1.10%), showing foreign investor confidence.
Limitation
- Dividend yield of 0.13% is negligible.
- Stock trading below both 50 DMA and 200 DMA indicates weakness.
- Quarterly profit variation (-42.5%) highlights volatility.
- DII holdings decreased (-0.17%), showing reduced domestic institutional support.
Company Negative News
- Volatile profitability with significant quarterly profit variation.
- Weak technical momentum with RSI near neutral and negative MACD.
Company Positive News
- Sequential PAT growth shows operational improvement.
- Increase in FII holdings reflects foreign investor confidence.
Industry
- Industry P/E at 50.6 indicates premium valuations compared to Titagarh’s fair multiple.
- Railway and infrastructure sector benefits from government-led capex and modernization initiatives.
Conclusion
⚖️ Titagarh is a moderate candidate for long-term investment. Strong ROCE, manageable debt, and fair PEG ratio are positives, but weak technicals and volatile profitability limit compounding potential. Entry around 740–780 ₹ offers margin of safety. Long-term investors should hold for 2–4 years, with partial exits near 950–970 ₹. Conservative investors may prefer peers with stronger dividend yield and more consistent earnings.