Railway stocks such as Indian Railway Finance Corporation Ltd (IRFC), Ircon International Ltd, Indian Railway Catering And Tourism Corporation Ltd (IRCTC) and Jupiter Wagons Ltd are trading below the levels they were trading at on July 22, a day ahead of Union Budget 2024. Rites Ltd, Texmaco Rail & Engineering Ltd, BEML and Rail Vikas Nigam Ltd fared better, gaining up to 5 per cent, though any sharp rally was missing, as stock investors turned their focus on quarterly earnings.
Data showed Ircon International Ltd is the worst hit, as the stock at Rs 294.50 is still trading 7.7 per cent lower than its July 22 closing price of Rs 319. The scrip had fallen 8.06 per cent on the Budget day. IRFC shares at Rs 194.45 are down 5 per cent over July 22 closing of Rs 204.55. This stock had fallen 5.08 per cent on the Budget day. The scrip has closed higher only once in the past 11 sessions.
RVNL gained 1.33 per cent to Rs 614.70 on Tuesday but it is still off its July 22 closing of Rs 623.95.
The FY25 Budget capital allocation for railways stood at Rs 2.55 lakh crore against the revised estimate of Rs 2.4 lakh crore for FY24. The targets, however, were hiked for electric locomotives, coaches, and wagons. Antique Stock Broking said the Budgetary support announced was negative for Ircon International Ltd, RITES Ltd and RVNL as the brokerage was expecting a higher capital outlay. High speed rail capital outlay at Rs 21,000 crore is positive for L&T and Ircon International, it said.
Jupiter Wagons at Rs 621.85 is 3.13 per cent below its July 22 closing of Rs 642. Jupiter Wagons reported its highest-ever Q1 revenue and profit after tax. It remains confident of delivering 10,000-plus wagons in FY25 which shall workout to almost a 25 per cent jump from FY24 levels/ Also, the company is optimistic about its braking business now that they have a healthy orderbook of more than 10,000 brake discs & a 1000 million brake systems order. Yet Dalal & Broacha Stock Broking has a target of Rs 500 on the stock.
Thanks to a 2.3 per cent rise, BEML shares are trading slightly above July 22 level of Rs 4,716.30. IRCTC shares are down 1 per cent.
Rites Ltd shares are up 4 per cent while Kernex Microsystems (India) Ltd shares gained 7 per cent over July 22 level. Texmaco Rail & Engineering Ltd edged 0.74 per ecnt higher over the Budget day level.
Texmaco Rail recently entered into definitive agreements to acquire wagon manufacturer Jindal Rail (JRIL) for a cash consideration of Rs 615 crore.
"We believe this acquisition would enable Texmaco to capture a larger pie of the booming rail capex in the country (refer to Engineering a remarkable turnaround). Maintain ‘BUY’ on the stock with an unchanged target price of Rs 331 (based on 50x Q1FY27E EPS)," Nuvama said.