Railway expansion plans bound to benefit Titagarh, other big players: Deepak Shenoy

In a chat with ET Now, Deepak Shenoy, Founder, Capital Mind, shares his views on Titagarh Wagons Ltd. Edited Excerpts:

ET Now: What do you make of Titagarh it has had a massive rally or any of the other railway/defence names?

Deepak Shenoy: Our primary pick here is BEML. We have a holding in BEML for a while now. It is a defence plus railways play in that. The move of Titagarh Wagons has been just incredible. It is like hitting new peaks almost on a daily basis nowadays. The reason, I guess, is that they are planning to massively expand the railways in the railway budget at least. It may not happen fully this year. It will probably happen over the next five years. There is some visibility so the companies are rushing to raise funds when they can. On the defence you got the FDI shot in the arm which perhaps helps them consider raising funds in a different way than they used to. So both of these defence, the expenditure visibility is not there.

You have about 10% increase in defence expenditure this year, but some of the capex is coming back. They are talking about Make In India a lot more. That is a good thing. In both cases it would be wise to raise funds now rather than wait for policy decisions to come and only then raise funds. At that time it will be more difficult to bring in the funds. We think that raising funds at this point is a good idea especially for railways companies. We have got a 100,000 crore budget on the railways expansion programmes just this year. So companies like Titagarh and BEML will obviously benefit. We are not sure about the smaller players Texmaco Rail. There is no visibility. The main point is to raise funds now, and let the visibility come later.