Railway-linked stocks take a hit
Railway-linked stocks, including Titagarh Wagons, Texmaco Rail and Kalindee Rail, slumped after railway minister Dinesh Trivedi’s Budget for 2012-13 failed to cheer investors.
Market experts blamed the poor show of railway stocks on lack of specifics on procurement of new wagons or upgradation of signalling systems.
The Budget announced a highest-ever outlay of Rs 60,100 crore for 2012-13 to add tracks and expand the railway network.
“This year’s Budget had broad announcements, it lacked specifics,” said SP Tulsian, an independent stock market analyst. “Unlike previous years, this year’s budget didn’t have exact allocation to specifics, like wagons, which disappointed investors,” he added.
| DERAILED ON THE BOURSES | |||
| BSE Price in Rs 14-Mar-12 | %chg* | %chg# | |
| Kalindee Rail Nirman | 104.85 | -6.55 | -5.12 |
| Texmaco Rail | 66.84 | -6.12 | 0.42 |
| Kernex Microsystems | 87.60 | -5.19 | 1.04 |
| Stone India | 33.04 | -4.92 | -4.53 |
| Titagarh Wagons | 411.60 | -4.25 | -2.08 |
| Texmaco | 29.90 | -0.50 | -1.64 |
| BEML | 687.25 | 0.90 | 2.66 |
| *Change over previous day #Change between Feb 29 and Mar 13 Data compiled by BS Research Bureau | |||
“The Budget didn’t have much mention of the procurement of modern rolling stock. Investors felt there isn’t much to benefit stocks,” said Ambareesh Baliga, chief operating officer at brokerage Way2Wealth. “Maybe the railways want to clear the huge backlog of orders first.”
Shares of some of the companies that get business or orders from Indian Railways closed more than six per cent lower. Most of the stocks, which had gained on opening trade on anticipation of a favourable Budget, lost steam after the Budget announced by Railway Minister Dinesh Trivedi didn’t have much to offer them.
“The fund constraint is severely bottlenecking the progress of the projects in hand, and the minister had to acknowledge that they are carrying a basket of huge backlog,” said Ramesh Maheshwari, executive vice chairman at Texmaco Rail & Engineering.
Shares of Kalindee Rail Nirman, an EPC (engineering, procurement and construction) contractor for the railways, declined 6.55 per cent to Rs 104.85. Texmaco Rail and Engineering, a freight car manufacturer, dropped 6.12 per cent to Rs 66.84 while Kernex Microsystems, a provider of anti-collision system solutions, fell 5.2 per cent to Rs 87.60.
Selling was witnessed across railway stocks, with only a few exceptions like BEML Ltd, which closed with modest gains of 0.90 per cent to Rs 687.25.
Interestingly, unlike in the past few years, most railway-related stocks hadn’t seen much gains in the run-up to the Budget.