5 railway stocks to watch out for in Budget 2024

CareEdge Ratings anticipates a budgetary allocation of around Rs 3 lakh crore for the railways in the Union Budget 2024-25, reflecting a 25 percent increase from the previous year.

Railway stocks were in the spotlight on July 23 with Finance Minister Nirmala Sitharaman set to present her seventh successive Budget and the first of Modi 3.0.

With the government expected to keep the focus on infrastructure spending, allocation towards railways is likely to be enhanced. Factors such as safety, travel quality, infrastructure improvement, faster development and completion of tracks and rolling stock manufacturing are likely to find a mention in the Budget.

CareEdge Ratings anticipates a budgetary allocation of around Rs 3 lakh crore for the railways, a 25 percent increase from the previous year.

From a stock market perspective, stocks like IRCTC, Container Corporation of India (Concor), Titagarh Rail Systems, Texmaco and Rail Vigas Nigam Ltd (RVNL) are likely to be in focus on the Budget day.

IRCTC 

IRCTC manages online ticketing, catering, and tourism. Increased budget allocations for railway infrastructure and digitisation initiatives will likely boost IRCTC's revenue from e-ticketing and catering services. Enhanced tourism promotion could also act as a catalyst.

The stock has had a lacklustre run on the bourses in the recent past – up less than 3 percent in the past three months.

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Container Corporation of India 

CONCOR provides multimodal logistics support, primarily container transportation. It operates through terminals across India, offering services including inland container depots, domestic and international freight handling, and logistics solutions.

Increased focus on trade facilitation and improved supply chains could lead to higher container traffic, boosting revenues from freight services and logistics.

The stock has lost more than 8 percent in the past month.

Titagarh Rail Systems 

Titagarh Rail specialises in manufacturing freight and passenger railcars, heavy earthmoving and mining equipment, and defence vehicles.

It caters primarily to the Indian Railways and defence sector along with international markets.

Defence budget enhancements could result in more orders for its specialised vehicles, bolstering overall growth.

The stock gained more than 9 percent in the past month and up 70 percent over the past three months.

Texmaco Rail 

Texmaco Rail & Engineering manufactures a wide range of railway products including freight cars, wagons, coaches, and bridges. It also offers engineering, procurement, and construction (EPC) services for rail infrastructure projects.

Higher expenditure on railway infrastructure development will positively impact Texmaco Rail. The stock has gained more than 26 percent in the past one month.

RVNL 

RVNL is a Miniratna company, engaged in the railway infrastructure development, which includes constructing railway lines, bridges and tunnels.  It is also involved in the construction of Mumbai-Ahmedabad high-speed rail project.

Recently, the company signed a memorandum of understanding with an Israeli company.

The stock has gained 50 percent in the past month. Over the last three months, the jump has been a whopping 144 percent.

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