Railway Budget 2016: Disappointment derails vendor stocks

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Updated: February 26, 2016 12:47:35 AM

Railway Budget 2016: The Railway Budget failed to lift most of the stocks of its leading vendors. Key rail wagon makers such as Kalindee Rail Nirman Engineers, Titagarh Wagons and Texmaco Rail Engineering fell between 8.5% and 9.5%.

Railway Budget 2016: The Railway Budget failed to lift most of the stocks of its leading vendors. Key rail wagon makers such as Kalindee Rail Nirman Engineers, Titagarh Wagons and Texmaco Rail Engineering fell between 8.5% and 9.5%.

Railway minister Suresh Prabhu announced a capex of R1.21 lakh crore for the world’s fourth largest railway network. Prabhu said that engineering procurement and construction (EPC) mode would be implemented for allotting works to ensure participation of large professional players and minimise cost and time overruns.

He said that at least 20 projects in the next financial year will be taken up on this mode and all works above R300 crore will be awarded on this mode.

Major private companies who could be probable beneficiaries of EPC include Seimens, Larsen & Tubro, Bharat Forge, ABB India and Cummins India. These companies have all lost 1.2%-3.5%.

The Budget included plans to commission 2,800 km broad gauge tracks and electrification of 2,000 km track in FY17.

Stone India, involved in engineering, procurement and construction projects for railways, and state-run rail coaches and spare parts manufacturer BEML slipped 5.74% and 4.06% respectively. Container Corporation of India, which transports wagons through rail and roads, gained 2.64%.

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