Railway Budget 2011 analysis: Gupta Equities

Zicom Security BSE | NSE 29/05/12 Are Mutual Funds betting on Zicom Security? Other Stocks in this news Kernex Microsystems (India) | BEML | Kalindee Rail Nirman (Engineers) | Era Infra Engineering | Gammon India | Texmaco Infrastructure & Holdings | Titagarh Wagons |

Gupta Equities has come out with a report on Railway Budget 2011.

The Rail Budget - In Summary:
 
The rail budget was a mere statement of accounts and wishful thinking in terms of PPP for several proposals. The Rail Budget seemed like a 'Work-In-Progress' towards achieving the goal of '2020 Mission' outlined last year by Railway Minister. However, it has the spared the common man who is already troubled by increasing Food & Fuel prices, with no change in passenger fares for the third consecutive year despite a widening deficit . Also, keeping an eye on the vote bank, AC E-ticket fee cut to Rs.10 from Rs.20 and Non-AC E-ticket fee cut to Rs.5 from Rs.10   
 
Corporate India has a lot to cheer about with the 'Status Quo' maintained in the railway budget with respect to freight hikes. So, companies in the Steel, Cement, Power and the Fertiliser sector remains on neutral grounds.
 
Key companies focused on the Rail industry to gain by the projects outlined in the Budget are - Zicom (soon to be launched Go-India Smart cards); Kernex Micro (anti collision devices); BEML , Kalindee (ambitious target of laying new lines by spending Rs.9,583 crs); Era Infra , Gammon India (doubling of spend on gauge conversion to Rs.2,470crs).
 
Key companies focused on the Rail industry to lose by the projects outlined in the Budget are - Texmaco , Titagarh Wagons , BEML (increased competition due to setting up of more factories across India to procure more wagons and coaches)

Financial	New Launches	Infrastructure	Facilities
Annual gross budgetary support Rs.20,000crs.	To introduce 56 new express trains	Set up single window for public-private partner project	To create fund to implement socially desirable plans
FY12 annual plan spend Rs.57,630crs.	To launch 3 new Shatabdi trains	Got 85 proposals for public-private partnership plans	To spend Rs.9,583crs for new lines in FY12
Market borrowing Rs.20,594crs	To launch 9 new Duronto trains	Working on 1,000 MW captive power plant in Bihar	Doubling spend on gauge conversion to Rs.2,470crs
IRFC to borrow Rs.10,000crs via tax-free bonds in FY12	10 Rajya Rani trains to ply intra-state from capitals	To set up 1,300 MW thermal power plant in Andhra Pradesh; 1,320 MW thermal power plant at Agra	Over 400,000 people availed of low cost "Izzat" ticket at Rs.25/100 km
Railway earnings set to top Rs.100,000crs mark in FY12	Frequency of 17 trains to be increased	To set up 700 MW gas-based power plant in Maharashtra	To set up rail-based industries for passenger coaches
FY12 operating ratio pegged at 91.1%	To launch 15 new suburban trains in Kolkata	To set up rail industrial park in Nandigram, New Bongaigaon	442 stations up gradation to be completed by March
Freight loading aimed 993 million tonnes in FY12	2 new trains, 2 projects for "trouble-free" states	To set up 2 more wagon units under joint venture mode	Longest tunnel, in Kashmir, to be completed this yr
Rs.13,824crs. for acquisition of rolling stock	1 AC double-decker train between Ahmedabad-Mumbai	To set up new coach factory at Kolar via JV or PPP; To set up coach factory in Palaghat	To do away with all unmanned rail crossings FY12
Saved Rs.300 crs on rail re-alignment	1 AC double-decker train between Jaipur-Delhi	To annually add 700km/yr of rail line vs. 180 km	To construct 172 rail overbridge in FY12
Railways saved Rs.3,700 crs due to austerity steps	To extend run of 33 trains	Imphal to be connected with rail network soon	To have anti-collision devices in 8 of 17 rail zones
Financial health expected to revive in FY12	To launch 34 new services in Kolkata Metro	To set up diesel locomotive centre in Manipur	3 railway zones to implement anti-collision devices
To add 1,000 km of new rail lines in FY12	To introduce 47 more suburban services in Mumbai	To set aside 12,000 acres for dedicated freight corridor	AC E-ticket fee cut to Rs.10 from Rs.20
		First coach from new Rae Bareli unit in 3 months	Non-AC E-ticket fee cut to Rs.5 from Rs.10
		Setting up metro coach factory at Singur	Concession for women senior citizen cut to 58 yr vs. 60
		Wagon procurement target 18,000 units FY12	Concession for senior male citizens up at 40% from 30%
		Multi-purpose 'Go India' smart card on pilot basis
		Launch 'Go India' smartcard for metro, long distance