Railway stocks have rebounded on government capex push and order wins, but uneven valuations and lukewarm brokerage calls raise doubts about the rally’s durability.
Railway stocks outperformed on September 15, with RVNL, Ircon, Texmaco, and Jupiter Wagons gaining sharply after securing fresh contracts worth hundreds of crores, extending their winning streak from last week
Railway stocks: Titagarh Rail Systems shares surged nearly 6%, extending gains for the third consecutive session. The stock has now recovered nearly 42% from its 52-week low of Rs 655 apiece, which it had hit in March.
Ircon International shares were the top gainer among the pack, jumping over 12 percent to trade at Rs 218 apiece, gaining the most in 20 weeks.
Recent border tensions had weighed on infrastructure projects, especially in states along the western border, including railway's expansion and upgradation plans.
Rail Infrastructure Development Company (Karnataka) Limited has placed the order for the construction of 9 stations - 1 elevated and 8 at-grade stations for the Bengaluru Suburban Rail Project (BSRP).
The railway company's revenue from operations declined nearly 3 percent year-on-year to Rs 4,567 crore in Q3 FY25.
Earlier on December 31, 2024, RVNL had announced that it had emerged as the lowest bidder for the given project.
Market experts were disappointed with the subdued capex targets for FY25 and FY26, seeing it as a shift in the government's focus from capex towards consumption.
While PSU stocks took a hit from the Budget’s muted capex allocation, analysts expect an uneven impact across capex-linked sectors. While sectors like railways and infra, may struggle, defence could continue to hold ground.
Shares of IRCTC were trading 3 percent lower at Rs 797 per share, while IRFC shares were down 5 percent at Rs 144 per share. IRCON shares dropped over 6 percent to trade at Rs 207.50 apiece.
Earlier this month, Moneycontrol reported, citing sources, that government is likely to increase railway budget by 15-18% in FY26 to accelerate rollout of Vande Bharat, high-speed bullet trainsets
RVNL stock has seen a strong resurgence in the past few days after it secured a Rs 3,622 crore contract from BSNL, recovering from the 7-month-low level it had hit on January 13.
Railway stocks are back on track! Prominent names like Jupiter Wagons, IRFC, Texmaco Rail, Titagarh Railsystems and RailTel Corp have surged 15-26% in the past month, leaving their July-October correction in the dust.
Valuation of stocks in these sectors remain at elevated levels, raising questions about their sustainability
Rail Vikas Nigam Ltd (RVNL) shares are in the sportlight as the PSU emerged as the lowest bidder for a Rs 270 crore Maharashtra Metro Rail project involving the construction of 10 elevated stations.
RITES shares surged up to 12 percent on the ex-bonus and ex-dividend trading day, with a record date set for September 20 for a 1:1 bonus and Rs 5 dividend.
Railtel Corporation is one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fibre network on exclusive Right of Way (ROW) along Railway track.
'Texmaco is benefiting from surging railway capex. A potential demerger of the rail EPC business can be a key re-rating trigger,' Nuvama said.
Markets were quick to shrug off early jitters from a new Hindenburg Research report alleging the SEBI chief's involvement in offshore entities connected to the Adani Group. Consequently, the Indian benchmarks--the Nifty 50 and Sensex, closed the day largely unchanged.
Shares of Rail Vikas Nigam Ltd (RVNL) surged 8% alongside other railway PSUs after the Cabinet approved Rs 24,657 crore worth of railway projects across seven states.
RVNL stock has a 'hold' rating from three analysts and zero buy or sell calls, according to Bloomberg data.
Titagarh Rail has commenced the export of traction converters, pursuant to which the first batch of 8 converters were shipped to Titagarh Firema S.p.A (Titagarh Firema), Italy on 19 July 2024.
Stocks such as Titagarh Wagons, Jupiter, BEML, RVNL fell 5%
Texmaco Rail stock has zoomed over 230 percent in the last one year, more than tripling investors' money. In comparison, Nifty delivered returns of 26 percent during this period.