Railway stocks are back in focus after nearly 1.5 years of a slump in share price. Stocks like RVNL, IRFC, RailTel, and IRCON are up as much as 12% over a 1-month period as a result of the late December rally. There are several structural and seasonal triggers that are helping the railway stocks. The pre-Bidget rally is decidedly one of the key factors. Looking forward, the Railway Ministry said it will soon operationalise the first Vande Bharat Sleeper for AC class travellers.
Railway stocks in focus: The big triggers
But there is more to it. The market is also pricing in close to a 10% hike in capex allocation for the railway sector. This, along with buzz about priority spending for Vande Bharat coaches and Kavach safety system, is helping boost investor appetite for these counters. The revised passenger fare is also seen as a key trigger.
Infrastructure creation also remained a focus for the Railway Ministry. The ministry added that electrification of the broad gauge network had advanced to near completion, with around 99.2 per cent of routes completed. Safety indicators showed a sharp improvement this year, and station redevelopment also gathered pace across the country.
Here is a look at how key railway stocks have performed in December –
Titagarh Rail Systems
The share price of Titagarh Rail Systems has over 10% in the past five trading sessions. The stock has surged as much as Rs 915 on the National Stock Exchange on December 29. The stock has given a return of 21% between December and December 30, seeing a sharp uptick.
IRCTC
On December 26, the stock rose 5% intraday as the fare increase came into effect. It is to be noted that the stock has fallen by over 11% in the last one year and almost 13% in the past six months.
Jupiter Wagons
Similarly, Jupiter Wagons’ share price rose more than 5% on December 26, intraday. The stock has given a return of 37% from December 18 to December 26. However, the stock has 14% in the last six months and 31% in the previous 12 months.
RVNL
The stock has surged by 8% in the last five trading sessions and rose as much as 13.4% on December 26. Apart from that, the stock has won several work orders as well.
Also, on December 29, the company won a Rs 165.04 crore work order from North Eastern Railway.
IRCON International
In the last five trading sessions, the stock price of IRCON International has given a return of nearly 7%, majority of the gains coming on December 26. However, the stock has declined 15% in the last six months and 17% in the past one year.
Apart from these stocks, RailTel Corporation of India, Container Corporation of India, Indian Railway Finance Corporation, etc., also see buying in the counters.
However, Indian Railways’ capital expenditure (capex) in the Union Budget of FY27 is likely to witness modest growth, with the transporter likely to get Rs 2.75 lakh crore, up just 3.7% on the Budget Estimate for the current year, as per a report by The Financial Express.
The latest statement from the Ministry of Railways indicated that in a bid to maximise freight earnings and induction of new wagons, the scale of wagon manufacturing was scaled in the last three years, with the target of 3000 MT (million tonne) loading by 2029-2030. This follows the record 3-year high wagon production of 41,929 units in FY25.