Rail stocks: IRFC, IRCON, Texmaco Rail rally up to 15% on heavy volumes

Indian Railway Finance Corporation (IRFC), and Engineering, IRCON International, RailTel Corporation of India, RITES, Rail Vikas Nigam (RNVL) and Titagarh Rail Systems have rallied 8 to 15

Shares of railway related sectors rallied up to 15 per cent on the BSE in Thursday’s intra day trade amid heavy volumes on value buying.

Indian Railway Finance Corporation (IRFC), Texmaco Rail and Engineering, IRCON International, RailTel Corporation of India, RITES, Rail Vikas Nigam (RNVL) and Titagarh Rail Systems rallied 8 to 15 per cent. In comparison, the S&P BSE Sensex was up 0.38 per cent at 73,038 on intra day trade.

On Wednesday, these stocks had tanked up to 20 per cent on the back of heavy selling in equity markets. Despite today's surge, currently, these companies are trading 19 per cent to 31 per cent below their respective 52-week highs hit in January.

The continued resolve of the Government of India to expand and improve the railway infrastructure under the initiatives such as “AtmaNirbhar Bharat” and “Make in India” is of immense support to rail related sector’s growth.

The Indian Rail Freight Industry is experiencing significant growth and improvements, with ambitious plans and increased investment aimed at enhancing capacity, efficiency, and sustainability. Annual freight target is expected to increase from 1400 million (m) tonnes to 3000m tonnes by 2027 implying an increase in the wagon fleet from current 3,36,900 to 5,00,000 by 2027.

Additionally, plans are underway to develop 100 PM Gati Shakti Cargo terminals for multimodal logistics within the next three years. The wagon industry, which previously faced challenges due to under-utilization of capacities, is expected to witness improvement with substantial orders from Indian Railways and the private sector. With the commissioning of dedicated freight corridors and a goal to increase the share of freight transport through railways, the Indian Railways plans to procure 90,000 wagons by 2025 which is the largest in history and it is nearly 5 times the number of wagons procured by railways in a year.

Among individual stocks, IRFC soared 15 per cent to Rs 142.60 on the back of over two-fold jump in trading volumes. A combined 184 million equity shares have changed hands on the NSE and BSE thus far in trade. However, the stock of the state-owned financial institution company is trading 26 per cent lower against its record high of Rs 192.80 touched on January 31.

Titagarh Rail Systems (TRSL) rallied 8 per cent to Rs 900 on the BSE. The stock has corrected 28 per cent from its record high of Rs 1,249 touched on January 20.

TRSL offers mobility solutions to billions with its prominent presence in both the passenger and freight rail systems including railway wagons, components, passenger coaches and metro coaches.

TRSL is the largest private sector manufacturer of railway wagons and an established player in passenger coaches. The company has been awarded the largest ever order for wagons by Indian Railways in addition to the orders for manufacture and supply of metro trains for Pune Metro and Surat Metro projects.

Moreover, TRSL’s order book is valued at Rs 27,466 crore and exhibits good diversification among both the business segments – freight rolling stock and passenger rolling stock.

The Government's unwavering emphasis on the building of world-class rail infrastructure in India makes the company enthusiastic about higher and sustained growth in the upcoming quarters, the management had said.