Shares of Titagarh Rail Systems (formerly Titagarh Wagons) and Ramkrishna Forgings jumped over 3% as markets opened on Friday.
What Happened: The surge today comes as the two companies announced bagging a massive contract from the Indian Railways. A consortium between RK Forgings and Titagarh Rail Systems won the contract to manufacture and supply 15.4 lakhs forged wheels over a span of 20 years, under the AatmaNirbhar Bharat Initiative by the Ministry of Railways, Government of India.
The ₹12,226.5 crore contract will see the consortium delivering 40,000 forged wheels during the first year, 60,000 wheels in the second year and 80,000 wheels every subsequent year thereafter. The consortium will be establishing a new “state-of-the-art” manufacturing facility to fulfil the contract, with total annual production targeted at 2 lakh wheels when fully operational.
The successful execution of this project will require a capital expenditure ranging from ₹1,000 crore to ₹1,200 crore. To meet this financial requirement, both companies will contribute capital equally.
The announcement has added to the momentum the two stocks have been enjoying for the past few months. Prior to today, both TWL and RK Forgings hit 52-week highs earlier this week as well. TWL’s share price hit a new 52-week high of ₹430 on Tuesday. RK Forgings share price hit a new 52-week high of ₹429.85 on Wednesday.
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Price Action: TWL share price was up 1.92% to trade at 424.15. RK Frogings shares were up 6.77% to trade at ₹436.05 as the markets opened on Friday.
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