Railway stocks took a beating on Friday after Rail Vikas Nigam Ltd (RVNL) and Ircon International Ltd reported a muted set of numbers in the quarter ended on September 30, 2024. The mutlibagger PSU counters, which have seen a sharp correction lately, were leading the laggards, falling up to 7 per cent for the day.
In its quarterly results, Rail Vikas Nigam revealed a significant decline in profit and a modest dip in revenue. The PSU firm's net profit fell 27 per cent year-on-year (YoY) to Rs 286.9 crore, while revenue from operations for the railway player declined by 1.2 per cent YoY to Rs 4,855 crore.
Ebitda for the second quarter of the ongoing financial year dropped 9 per cent YoY to Rs 271.5 crore, while margins contracted 40 bps to 5.6 per cent for the reported quarter. To recall, RVNL shares are currently under the BSE and NSE's long-term additional surveillance measure (ASM) due to recent price volatility.
Shares of Rail Vikas Nigam crashed 7.02 per cent to Rs 444 on Friday, with its market capitalization slipping below Rs 94,000 crore. The stock had settled at Rs 477.55 in the previous trading session on Thursday. It has increased more than 31 per cent from its 52-week high at Rs 647 hit in July 2024.
Another PSU counter, Ircon International reported a 17.9 per cent YoY fall in its net profit at Rs 206 crore for the September 2024 quarter. The railway firm' revenue dropped 19.3 per cent YoY to Rs 2,447.5 crore. EBITDA of the PSU player during the September quarter dropped over 23 per cent to Rs 201 crore for the reported quarter.
Shares of Ircon International tanked nearly 5.95 per cent to Rs 202.30 during the day, compared to its close at Rs 215.10 in the previous session. The total market capitalization of the company slipped below Rs 20,000 crore mark. The stock has corrected more than 42 per cent from its 52-week high at Rs 351.65, hit in July 2024.
Among other railway stocks, Indian Railway Finance Corporation Ltd (IRFC) and RITES Ltd were down 2 per cent each to Rs 150.35 and Rs 286.05, respectively. Indian Railway Catering and Tourism Corporation Ltd (IRCTC) was down one per cent to Rs 833.55 for the session. All these stocks have corrected 28-35 per cent from their respective 52-week highs.
Elara Capital recently upgraded RITES to 'buy' following the recent correction and it expects rebound in exports in FY26 with robust order inflows in line with guidance (one order win a day) make RITES a favorable play in infrastructure. It has a target price of Rs 365 on the stock.
Similarly, Axis Securities also has a similar rating on RITES, but its target price stood at Rs 325. On Ircon International, Antique Stock Broking has an 'hold' rating with a target price of Rs 251 on the stock.
IRCTC reported weak numbers mainly due to decline in the catering segment which was positively offset by improvement in Internet ticketing business. Going forward, the company will benefit from increased capacity due to DFC, increase in Vande Bharat trains and collaboration with food aggregators, said IDBI Capital with a 'hold' rating and a target price of Rs 927 on the stock.