Railway stocks felt the brunt of the fall since markets started declining from their all-time highs due to various factors including high valuations.
Shares of railway stocks have seen a sharp fall from their 2024 record highs. This comes amid an overall low market sentiment after hitting massive highs in 2024. Amid anticipation of big ticket announcements for the national transporter at the upcoming Union Budget 2025, let's check how much the major railway stocks corrected in the past few months.
Indian Railway Finance Corporation (IRFC) shares closed at Rs 128.44 on January 13. This marks a fall of nearly 44% from their 52-week-high of Rs 229.05 which the stock had hit on July 15, 2024, ahead of the Union Budget 2024. Notably, IRFC has the highest market capitalisation among rail stocks at Rs 1.75 lakh crore, as per data on BSE.
Shares of Rail Vikas Nigam Ltd (RVNL) have also recorded strong losses. The stock closed at Rs 358 on January 13, down around 45% from its 52-week-high record of Rs 647 which it had hit on July 15, 2024. Notably, the stock has seen continuous decline over the past few sessions. It is currently at a seven-month low level.
Indian Railway Catering and Tourism Corporation (IRCTC) shares hit a fresh 52-week-low record of Rs 743.75 on January 13. The stock is around 35% down from its 52-week-high level of Rs 1,139, which it had hit on May 23, 2024. Notably, international brokerage Macquarie on January 10 initiated coverage on the stock with an 'outperform' rating and a target price of Rs 900. This implies an upside potential of 21% from the current levels.
Container Corporation of India (CONCOR) shares ended on January 13 at a level close to its 52-week-low record. The stock closed at Rs 728.50 on January 13, which is nearly 38% lower than its 52-week-high record of Rs 1,180. The stock had hit the record high level on June 4, 2024.
Ircon shares have fallen nearly 48% from its 52-week-high record of Rs 352. This is the highest decline among the major railway stocks. The shares closed at Rs 181.74 on January 13.
Titagarh Rail Systems shares had hit a fresh 52-week-high record of Rs 1,897, days after the Union Budget 2024. From then, the shares have fallen around 47% to close at Rs 1,000.8 on January 13.
Shares of RailTel Corporation of India have also seen a significant fall of around 42% from the 52-week-high record of Rs 617.8 which the stock had hit on July 12. The shares closed at Rs 359.8 on January 13.
Texmaco Rail and Engineering shares closed at Rs 171.88 on January 13. This marks a fall of nearly 42% from its 52-week-high record of Rs 296.49 which the stock hit on July 12.
Shares of Jupiter Wagons have fallen around 44% from its 52-week-high level of Rs 422.5 as hit on July 5. The shares closed at Rs 422.5 on January 13.
Speaking about rail stocks, Siddhartha Khemka, head of research at Motilal Oswal Financial Services said, "Government spending has remained weak in the current fiscal so far so the market is expecting it to gather pace in the second half of FY25, with stalled railway contracts coming out."
While Khemka believes that the current levels present an opportunity to invest in railway stocks, he also cautioned that the market’s expectations must align with actual government actions. "While there is lot of hope and anticipation, government activity should also align with the expectations to ensure order momentum for the sector remains strong in the future as well," he said.
Meanwhile, Sanjeev Hota, head of research at Sharekhan, highlighted the sector’s robust growth prospects and strong business visibility given the government's infrastructure focus.
According to analysts, this pullback was necessary after the sector's meteoric rise over the past two years inflated valuations to unsustainable levels.
Hota offered a more cautious perspective, suggesting that the risk-reward trade-off remains unfavorable despite the recent correction. On that account, Hota prefers to not increase allocations to the sector and rather wait for a steeper correction.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
