Selective approach advised: Prashant Khemka's insights on Railway stock investments

Prashant Khemka

There are many companies in the railways segment which would benefit disproportionately with the increasing capex," says Prashant Khemka, the founder of White Oak Capital in an interview with MoneyControl held on September 13.

Khemka believes that railways are a space where a tremendous amount of capital expenditure is going to take place over the next decade. The market expert mentioned that their portfolio does contain these stocks which are set to benefit from increased capital spending. However, he stated that this should not be considered as a blanket statement for all companies related to this business.

"Just because you are in the railways business does not mean you can merit any valuation," he said. Khemka highlighted that investors must focus on companies that possess the strength to withstand rising competition in the given industry.

"One needs to be careful in the railway sector because there are so many companies that provide so many different products," said Khemka. For instance, some companies may have a hundred percent exposure to railways while some may have 50 percent, etc.

Also read: More steam left in rail stocks; RVNL, Railtel rally over 20% in one week

Shares of Rail Vikas Nigam Ltd (RVNL), Titagarh Rail Systems, Jupiter Wagons, Texmaco Rail and Engineering, IRCTC, Railtel Corporation of India, and RITES have surged 5-24 percent in the past week.

The RVNL stock has delivered a 164 percent return over the past six months, while the Titagarh Rail Systems stock has delivered a 61.5 percent return over the same period. Jupiter Wagons rallied 31 percent, and Rites surged 54.5 percent over the past six months.