Fireworks & Fallout Themes: Railway rally ahead? Kranthi Bathini picks BEML, RVNL, Titagarh Wagons for Samvat 2082

Kranthi Bathini, Equity Strategist at Wealthmills Securities

Railway stocks have shown a lacklustre performance in Samvat 2081, slipping from their multi-bagger highs of the past, but Kranthi Bathini, Equity Strategist at Wealthmills Securities, sees selective opportunities for investors with a medium- to long-term horizon. “BEML, RVNL, and Titagarh Wagons look very attractive at current valuations,” he said, pointing to their strong order books, diversified business models, and key positioning in the railway infrastructure and wagon segments.

The story of Samvat 2081, however, has been a story of consolidation. After a strong momentum phase over the previous 12 months, railway stocks underwent a broad correction.

“Even though valuations looked stretched and stocks had run up ahead of fundamentals, execution remained solid. The last year was mainly a consolidation phase for the sector,” Bathini explained on Moneycontrol’s Special Diwali edition – Fireworks and Fallout Themes.

Indeed, the numbers tell the tale: Texmaco Rail plunged 37.2 percent, RVNL slid 27.3 percent, Titagarh Rail fell 26.9 percent, and other names like IRFC, Ircon International, and Rites saw double-digit declines in Samvat 2081, while BEML alone managed a modest 7.2 percent gain.

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Looking ahead to Samvat 2082, Bathini sees a constructive environment. With the Railways Board recording the highest capex among large CPSEs between April and July 2025, execution in the next six months is expected to accelerate. “The key reason for past underperformance was the excesses built up from previous multi-bagger runs. Now, after this healthy correction, valuations are attractive, and investors can start accumulating railway stocks for decent mid-term returns.”

He stressed, however, that stock selection is crucial. Execution capabilities and segment focus matter more than PSU versus private classification. On the PSU side, BEML benefits from its diversified exposure to railways and defence, while RVNL remains a strong player in railway infrastructure. Among private names, Titagarh Wagons stands out for its wagon orders in both passenger and freight segments.

Coverage and safety-focused companies like Concorde Control and Kernex Microsystems also present long-term growth opportunities, though investors should be mindful of valuation stretches in momentum zones. “These stocks will receive strong order books and earnings visibility, but profit booking is advisable if valuations spike,” he noted.

For investors looking to navigate the railway theme post-consolidation, Bathini’s advice is clear: start accumulating selectively, focus on execution, and maintain a medium- to long-term horizon. With the sector poised for steady capex-driven growth and attractive valuations, Samvat 2082 could be the year railway stocks reclaim their narrative after a pause.

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