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Estimated Discount To Fair Value: 22.1%

RITES, currently priced at ₹729.65, is assessed to be undervalued with a fair value estimate of ₹936.11, reflecting a substantial discount. The company's revenue and earnings are expected to grow annually at 13.4% and 18.54% respectively, outperforming the broader Indian market projections of 9.6% for revenue and 15.8% for earnings growth. However, its dividend coverage is weak as dividends are not well supported by earnings or free cash flows, indicating potential challenges in sustainable payouts despite recent strategic partnerships and contracts enhancing its business scope.

• Our earnings growth report unveils the potential for significant increases in RITES' future results.

• Click to explore a detailed breakdown of our findings in RITES' balance sheet health report.

Texmaco Rail & Engineering

Overview: Texmaco Rail & Engineering Limited is an engineering and infrastructure company operating both in India and internationally, with a market capitalization of approximately ₹109.72 billion.

Operations: The company generates revenue through three primary segments: the Freight Car Division, which contributes approximately ₹27.50 billion, and two infrastructure segments—Electrical and Rail & Green Energy—bringing in about ₹2.26 billion and ₹5.27 billion, respectively.

Estimated Discount To Fair Value: 17.1%

Texmaco Rail & Engineering, trading at ₹274.67, is positioned below the estimated fair value of ₹331.36, suggesting a modest undervaluation. The company's earnings have surged by 335% over the past year and are projected to continue growing at 28.9% annually over the next three years, outpacing the Indian market's forecast of 15.8%. However, its share price has been highly volatile recently and shareholder dilution occurred in the past year, posing potential risks for investors considering cash flow-based valuations.

• Insights from our recent growth report point to a promising forecast for Texmaco Rail & Engineering's business outlook.

• Dive into the specifics of Texmaco Rail & Engineering here with our thorough financial health report.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NSEI:RAJESHEXPO NSEI:RITES and NSEI:TEXRAIL.

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