Why Texmaco Rail & Engineering Share Is Falling Today

Texmaco Rail share price closed at Rs 125.91 on December 12 showing a decline of Rs 1.49 or 1.15% from previous close. The stock has been under pressure lately and investors are wondering about the reasons behind this continuous fall.

Texmaco Rail & Engineering is facing multiple challenges that are pulling down its share price despite having a strong order book of over Rs 6300 crore. The company which is a major player in railway wagon manufacturing and engineering projects is dealing with both fundamental and technical issues that are affecting investor confidence.

The stock has dropped nearly 46% from its 52 week high of Rs 239.65 and is currently trading just 9% above its 52 week low of Rs 115.10. This sharp correction has worried many retail investors who entered at higher levels.

The trading volume on December 12 was 758534 shares with most of the selling pressure coming from weak quarterly results and sector wide concerns. Multiple factors are working together to create downward momentum in Texmaco Rail share price and understanding these reasons can help investors make better decisions about their holdings.

Key Takeaways

• Texmaco Rail share fell 1.15% to Rs 125.91 on December 12 2025
• Q2 earnings showed 13.7% YoY drop in net profit to Rs 65 crore
• Stock has corrected 46% from 52 week high of Rs 239.65
• High debt to equity ratio of 0.8x raising concerns among investors
• Order book stands strong at Rs 6300 crore providing future revenue visibility
• Technical indicators showing bearish trend with stock below key moving averages
• Analysts maintain average target of Rs 160 suggesting 27% upside potential

Also Read: Why Sharda Motor Industries Share Is Falling Today

Q2 Earnings Disappointment Hit Investor Sentiment

The primary reason for Texmaco Rail share falling is the weak Q2 results announced on November 16 2025. The company reported consolidated revenue of Rs 1266 crore which declined 7.1% year on year despite showing 37.8% quarter on quarter growth.

This revenue miss came mainly from slower execution in bridges and hydro projects due to monsoon related delays. The management had guided for better performance but failed to deliver on expectations.

Net profit dropped significantly by 13.7% to Rs 65 crore compared to Rs 75 crore in same quarter last year. The earnings per share came down to Rs 1.61 from Rs 1.82 earlier which disappointed investors who were expecting margin expansion.

Operating margins contracted to 5.1% from 6.2% last year due to rising raw material costs especially steel prices which increased by 4 to 6% during the quarter. Interest expenses also went up because of high debt levels affecting bottom line profitability.

High Debt Levels Creating Financial Pressure

Texmaco Rail is carrying a debt to equity ratio of 0.8x which is much higher than the industry average of 0.5x. This elevated leverage is creating concerns about the company’s ability to service debt especially during periods of slower revenue growth.

The interest coverage ratio has fallen to 4.2x from 5.1x year on year showing that more profits are going toward debt servicing. The company took on additional debt for expanding wagon manufacturing capacity but delays in order execution are preventing quick deleveraging.

Working capital management is another area of concern with receivables stretching beyond 120 days. This means Texmaco Rail is not collecting payments quickly from customers which is tying up cash and forcing the company to depend on debt for meeting operational expenses.

Return on equity stands at just 9% which is quite low compared to industry peers who are generating 12 to 15% ROE. Foreign institutional investors have been selling small cap stocks heavily in December with net outflows of Rs 800 crore and Texmaco Rail got caught in this broader selloff.

Technical Breakdown Triggering Further Selling

From a technical analysis perspective Texmaco Rail share is showing clear bearish signals. The stock broke below its 50 day simple moving average of Rs 135 on December 10 which triggered stop losses for many traders. This breakdown was followed by MACD showing a bearish crossover which confirmed the downtrend. The stock fell nearly 4% intraday to Rs 124.50 on December 11 as technical traders exited positions.

Currently Texmaco Rail is trading below all short term moving averages including 5 day EMA at Rs 128.50 and 20 day EMA at Rs 132.20. However it is still holding above the 200 day EMA near Rs 118 which is providing some support.

RSI indicator is at 58 showing the stock is not oversold yet and could see more downside if selling pressure continues. The stock needs to break above Rs 130 to show any signs of reversal otherwise the next support lies at Rs 120 levels.

Railway Sector Facing Headwinds

The broader railway sector has been underperforming in recent weeks which is also dragging down Texmaco Rail share price. Railway stocks like RVNL and Titagarh have corrected 30 to 40% from their highs due to concerns about slowing government capex.

The rail budget execution for first half of fiscal year is at only 70% which is lower than expected and raising doubts about order flow in coming quarters.

Steel prices which are the main raw material for wagon manufacturing have been volatile and increased by 5% month on month in November. This input cost inflation is squeezing margins for all railway equipment manufacturers including Texmaco Rail.

The company manufactures freight wagons which account for 80% of its revenue mix and any slowdown in freight movement affects demand for new wagons. Additionally FII outflows of over Rs 15000 crore from Indian equities in December have caused rotation from mid caps to large caps hurting stocks like Texmaco Rail with beta of 1.3.

Order Book Provides Some Hope

Despite the current challenges Texmaco Rail has a robust order book of Rs 6300 crore which is up 20% quarter on quarter and nearly 2 times its trailing twelve month revenue. The company recently won a Rs 15.8 crore order from JSW Energy for rolling stock supply which was announced on December 12. This order along with other wins from IRCON and government railway projects provides revenue visibility for next 12 to 18 months.

The management is confident of achieving 15 to 20% revenue growth in FY26 driven by execution of pending orders. The diversification into hydro projects and bridge construction is also expected to reduce dependence on wagon business.

However investors want to see actual execution and margin improvement before getting confident again. Analysts from Emkay Global and HDFC Securities maintain positive long term view with targets of Rs 180 and Rs 175 respectively citing strong order pipeline and reasonable valuations.

What Should Investors Do Now

For existing shareholders of Texmaco Rail the current fall is painful but panic selling may not be the right approach. The stock is trading at attractive valuations with EV to EBITDA multiple of 8x for FY26 compared to peer average of 10x. If the company can execute its order book properly and control costs the stock has potential to recover to Rs 160 levels which represents 27% upside from current price.

However investors should watch the Q3 results closely which will be announced in February 2026. If volumes continue to disappoint and margins don’t improve the stock could test Rs 110 to Rs 115 levels. Key support lies at Rs 120 and a break below that would signal further weakness.

New investors who believe in the railway sector story can consider buying in small quantities at current levels but should keep strict stop loss at Rs 118 which is the 200 day moving average.

Tags: Texmaco Rail share price, Texmaco Rail falling, railway stocks India, Texmaco Rail news, small cap stocks, railway sector analysis, Texmaco Rail target price

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