IRCTC, IRFC, RVNL: Engines Of Railway Stocks Warming For More Gains After Budget? 50-330% Up In 6 Months

Just before the Finance Minister took the podium in Parliament on Thursday to present India's interim budget for FY25, railway stocks like RVNL, IRFC, IRCTC, and Titagarh Rail were accelerating. However, after Budget announcements, these stocks toppled and ended in red. Investors booked profits in already record-high trading railway stocks, that was what has happened after the Budget. But the announcement of the reforms by the FM only indicates a future rally!

It will not be surprising that there are now a buying-on-dips opportunities being created in these stocks for fresh buying either from existing or new investors because experts are optimistic about railways after the Budget announcement.

Indian Railway Finance Corporation (IRFC):

The largest railway stock, IRFC with a market cap of over Rs 2.22 lakh crore, jumped as much as 4.7% to hit an intraday high of Rs 183.25 apiece on BSE in early trade, but soon after the stock reversed its trend and ended at Rs 170.05 apiece, down by 2.9% on the exchange.

Investors cashed their gains after Budget announcements, however, that did not IRFC give the most returns to investors in six months.

In six months, IRFC shares have rallied by a whopping 328% on BSE. The stock was below Rs 40 levels six months ago. But India's largest railway stock has made investors super rich compared to a 52-week low of Rs 25.45 apiece, as the stock is currently higher by 568%.

Indian Railway Catering and Tourism Corporation (IRCTC):

IRCTC is an Indian Railways catering services provider and has gained robustly since last year with budget allocations for reviving the sector.

In early trade of Thursday, IRCTC shares jumped as much as 1.52% to an intraday high of Rs 993.20 apiece, but soon gave up their gains and ended at Rs 963.00 apiece down by 1.6% on BSE. Its market cap is at Rs 77,040 crore.

In six months, IRCTC shares have zoomed by over 51% and touched a 52-week high of Rs 1,049.75 apiece. The stock is already up by 73% currently compared to its 52-week low of Rs 557.15 apiece.

Rail Vikas Nigam Ltd (RVNL):

A similar pattern was seen in RVNL shares as well. RVNL shares climbed by 3.42% to hit an intraday high of Rs 318.85 apiece on BSE in early trade, but reversed its trend and ended at Rs 297.55 apiece down by 3.5%. Its market cap is at Rs 62,039.77 crore.

In six months, the stock jumped by nearly 141%. Despite the latest downside, the stock is currently trading higher by nearly 430% from its 52-week low of Rs 56.15 apiece.

Titagarh Rail Systems:

Compared to RVNL, IRFC, and IRCTC, Titagarh gained the least by 1% to an intraday high of Rs 1101.85 apiece in early trade on Thursday, but it also recorded the lowest quantum of fall by 0.6% to end at Rs 1,101.85 apiece after market hours. Its current market cap is at Rs 14,653.18 crore.

In six months, Titagarh is up by 67% on BSE. But from its 52-week low of meagre Rs 194.80 apiece, Titagarh shares have risen by a humungous 459% on the exchange.

Interim Budget On Railways:

FM Nirmala Sitharaman has made transformational announcements for the railways sector in the Interim Budget.

She said, three major economic railway corridor programmes will be implemented. These are (1) energy, mineral and cement corridors, (2) port connectivity corridors, and (3) high-traffic density corridors.

She added that theprojects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and reduce costs.

Further, she said, the resultant decongestion of the high-traffic corridors will also help in improving the operations of passenger trains, resulting in safety and higher travel speed for passengers. Together with dedicated freight corridors, these three economic corridor programmes will accelerate our GDP growth and reduce logistic costs.

Moreover, she added, 40,000 normal rail bogies will be converted to the Vande Bharat standards to enhance the safety, convenience and comfort of passengers.

All the above-mentioned stocks will benefit from this move.

What Experts Say About Interim Budget?

Mukesh Kochar, National Head of Wealth at AUM Capital:

The trajectory of fiscal deficit has been kept low which is positive from a rating, FII flow and currency point of view. Corridor will port connectivity will reduce turnaround time hugely and will have a very positive effect on the economy. Although it is an interim budget and final will come out post-election only.

Ajay Singh, President, ASSOCHAM:

I commend the FM for her unwavering commitment to sabka saath, sabka vikas, sabka vishwas. I commend especially the increase in infrastructure spending that will have a multiplier effect on our economy. I commend the evident railway corridors, and the one lakh crore fund for research and development and the startup sector. The emphasis on clean energy, technology and digital infrastructure will make India a world leader. This is India's moment, and this budget is part of a continuous process of making policy that will provide massive opportunities for India and Indians.

ITI Mutual Fund Group:

The key themes of the Interim Budget 2024 are fiscal consolidation and continued capex led growth. The focus continues to be on Infrastructure, Renewable Energy, Housing, Agriculture and Railways. The direction is towards a manageable growth outlay within a prudent fiscal management framework.

Disclaimer: The write-up just highlights about the development and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.