Rail Budget 2012-13: An ambitious agenda, says Emkay

Emkay Global Financial Services has come out with its report on Indian Railway Budget 2012-13.

• Rail budget sets ambitious targets for FY13 (revenue) and 4x increase in capital outlay 12th five year plan to Rs7350bn. Aims to achieve sharp improvement in operating ratio
• FY13E highlights (1) Gross Traffic Receipts at Rs1.3tn (+28%) (2) Operating Ratio at 84.9% (+1010 bps) and (3) capital outlay at Rs 601bn (up 21%)
• Targeting operating ratio to 74% by FY17 v/s 95% in FY12. This is significantly higher than avg. of 93% (FY09-FY12). Budget is benchmarking ratio to best year ever of 1963-64
• Sharp freight rate hike (on 6th march) will be negative for sector relying railway for transportation. Mixed budget for railway related stocks

Rail budget announced today is an combination of tighter allocation, expected improvement in operating ratio (at 85% from 95% in FY12) aided by increase in freight rates (passenger fare following the cargo freight hiked last week) translating into modest rise in GoI

Read More