Amber Group and Titagarh Rail Systems forge a strategic alliance with Rs 120 crore investment; stock gains

Joint Venture with Rs 120 crore investment 

Titagarh Rail Systems and Amber Group have joined forces to conquer the Indian and Italian train component market. Both companies will form a joint venture with equal investments of up to Rs 120 crore each. This new SPV will manufacture crucial components for rail and metro coaches in India, while also injecting fresh capital into Titagarh’s Italian subsidiary, Firema. The Italian government’s investment arm, Invitalia, is also expected to join the Firema investment round.

To sweeten the deal, Firema will grant preferred supplier status and first-refusal rights to the SPV and both parent companies. This strategic alliance promises to boost India’s railway manufacturing prowess and expand Titagarh’s reach into Europe. The two groups will set up facilities in India to manufacture critical components and subsystems for the Railway industry and target to achieve a wallet share of at least 20% value per passenger coach.

Financial Performance

In Q2FY24, the company posted a 23.54% increase in its consolidated revenue at Rs 927.07 crore compared to Rs 750.45 crore from the previous year’s corresponding quarter. The operating profit of the company stood at Rs 72.31 crore, while the PAT of the company stood at a loss of Rs 5.65 crore, from a loss of Rs 2.29 crore last year’s same quarter.

Business Overview

Rajpura-based Amber started operations in 1992. It manufactures and assembles major RACs and key functional and reliable components, such as heat exchangers (coils), multi-flow condensers, sheet metal components, injection-moulding components, system tubing, inner case liners, washing machine tub assembly, and other consumer durables. The manufacturing facilities are in Dehradun (Uttarakhand), Rajpura (Punjab), Jhajjar (Haryana), Greater Noida (Uttar Pradesh), and Pune (Maharashtra).

Stock Price Movement

Today, the shares of Amber Enterprises India Ltd opened at Rs 3,845.80, with a high and low of Rs 3,918 and Rs 3,809.40, respectively. The stock is currently trading at Rs 3,890.95, which increased by 2.31%. The stock has a 52-week high of Rs 3,968.95 and a 52-week low of Rs 1,762.25. The company has an ROCE of 10.7% and an ROE of 8.75%, with a market capitalization of Rs 13,157 crore.

The stock has shown impressive growth, and investors should keep a close eye on this stock.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.