Rail Vikas Nigam Ltd (RVNL), IRFC Ltd, IRCON International and IREDA Ltd were among railway stocks that rallied up to 13 per cent in Monday's trade amid high volumes. Shares of IRFC saw 18,34,09,141 shares changing hands on NSE so far, amounting to Rs 3,694 crore. This stock climbed 6.07 per cent to Rs 199.65.
RVNL shares soared 12.50 per cent to Rs 552.45 on NSE. A total of 10,83,29,148 RVNL shares worth Rs 5,944 crore changed hands on the exchange. IREDA saw 6,70,66,515 shares worth Rs Rs 1,611 crore changing hands, as the stock climbed 4.78 per cent to Rs 239.78. IRCON International shares were up 5.15 per cent at Rs 323.60, as 4,73,31,233 shares worth Rs 1,542 crore changed hands.
On Friday, Business Today reported that Indian Railways has started the production for 200 non-AC trains, with Railway Minister Ashwini Vaishnaw suggesting that the production of 50 such trains was already at an advance stage while 150 others were in the pipeline. As per the BT report Vaishnaw said about 2,500 new general passenger coaches are being manufactured and another 10,000 coaches are likely to be added by FY25 to meet rising demand.
Antique Stock Broking noted that the railways sector has seen increased allocation in the past few budgets. Railway expenditure for the ongoing financial year was pegged at Rs 2.6 lakh crore in the interim Budget. This is against a total spending of Rs 2.2 lakh crore in FY15-19. This should directly benefit companies with increased wagon procurement such as Titagarh and Jupiter Wagons. In the infrastructure space, RVNL and IRCON stand to benefit, Antique said.
"The icing on the cake is that export opportunities are popping up as well. "After winning orders from Mozambique (Rs 300 crore) and Bangladesh (Rs 830 crore), RITES has the potential for new inflows from Zimbabwe (Rs 850 crore), where negotiations are yet to translate into a LoA. RVNL too has submitted expression of interest to Botswana Railways, then the Namibia Trans Kalhari project team," it said.
For 1QFY25, Antique expects revenue for our coverage universe to register 12 epr cent YoY growth on account of strong growth in the wagon manufacturing space. The construction segment may pick up going ahead as orders flow in after the recently concluded union elections, it said.
"We expect margins to remain flat at 8.2 epr cent for our coverage universe impacted by margin contraction in RITES. However, we expect wagon manufacturers to report a 42 bps and an 18 bps YoY expansion for Titagarh and JWL respectively. We expect our coverage universe to report 17% YoY increase in PBT and 21 per cent YoY increase in PAT for the quarter. At the aggregate level, the outlook on capex and ordering activity, and execution traction of the new projects won would be key monitorable going ahead," it said.