Railway stocks in demand; Jupiter, Titagarh, RailTel, RVNL rally up to 13%

Key projects, including the PLI scheme for train parts, Gati Shakti inclusion, redevelopment of railway stations, and the multitracking project, are opening unparalleled possibilities for the sector

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Shares of railway and related companies have rallied by up to 13 per cent on the BSE in Wednesday’s intra-day trade on expectation of outlook improvement.

 

Jupiter Wagons (13 per cent at Rs 559.60), Titagarh Rail Systems (9 per cent at Rs 1,347), Texmaco Rail & Engineering (6 per cent at Rs 235.60), RailTel Corporation of India (6 per cent at Rs 461.30), Indian Railway Finance Corporation (5 per cent at Rs 164.80), Rail Vikas Nigam (RVNL) (5 per cent at Rs 482.45) and IRCON International (5 per cent at Rs 233.25) have rallied between 5 per cent and 10 per cent. In comparison, the BSE Sensex was up 0.13 per cent at 81,613 at 11:15 AM. Most of these stocks had corrected by up to 44 per cent from their respective 52-week highs touched in July.

 

Indian Railways is witnessing unprecedented growth, propelled by innovative advancements in both freight and passenger transport. The construction of new freight corridors and transformative government initiatives are igniting significant private sector investments in the sector. Key projects, including the Production Linked Incentive (PLI) scheme for train parts, Gati Shakti Inclusion, the redevelopment of railway stations, and the multitracking project, are further opening doors to unparalleled possibilities.

 

Government initiatives aimed at fostering private sector investments in the railway sector are propelled by several schemes, including the General-Purpose Wagon Investment Scheme (GPWIS), Liberalised Special Freight Train Operations (LSFTO), Automobile Freight Train Operator Scheme (AFTO), and Wagons Leasing Scheme.

 

Capital outlay for the Indian Railways for FY25 stood at Rs 2.62 trillion (22.7 per cent of the total budgetary capex), and 2.7 per cent more than FY24. A total of 452 railway projects (including 183 New Line, 42 Gauge Conversion and 227 Doubling) covering a length of 49,323 km, are in different stages of planning/sanction/execution, at a cost of approximately Rs 7.33 trillion. Indian Railways is expected to source additional rolling stock to cater to rising volumes as India is emerging as one of the major exporters of coaches and rakes.

 

Implementation of three major railway economic corridors under the PM Gati Shakti program: East-Coast, East-West, and North-South sub-corridor, totaling over 4,200 kilometers, will lead to a further increase in demand.

 

Among the individual stocks, Jupiter Wagons (JWL) has surged 13 per cent to Rs 559.60 on the back of a six-fold jump in trading volumes. A combined 9.53 million equity shares of the wagon company have changed hands on the NSE and BSE. The stock had hit a 52-week high of Rs 748.05 on July 5, 2024. As on September 30, 2024, JWL had an order book position of Rs 6,643.66 crore.

 

JWL is a provider of comprehensive mobility solutions, with diverse offerings across Freight Wagons, Locomotives, Passenger Coaches (LHB), Braking Systems, Metro Coach, Commercial Vehicles, ISO Marine Containers, and products such as Couplers, Draft Gears, Bogies and CMS Crossings.

 

Shares of Texmaco Rail rallied 6 per cent to Rs 235.60 on the back of a two-fold jump in trading volumes. The management had said the rail freight industry is poised for significant growth in the upcoming years, with freight volumes by rail projected to increase to 45 per cent by 2030, from 27 per cent, as outlined in the National Rail Plan Vision 2030. 

 

The sector plays a crucial role in supporting the government to achieve its goal of 3,000 MT of freight loading whilst also creating valuable opportunities for Texmaco. Looking ahead, the management said the company remains focused on leveraging these government initiatives while also addressing growing demand from private customers and export markets.

 

Shares of RailTel Corporation surged 5 per cent to Rs 461.30 after the company said it has received a work order worth Rs 11.11 crore from Mahatma Phule Krishi Vidyapeeth. In one month, the company has received various orders amounting to Rs 270 crore. As on November 7, the company’s order book position stood at Rs 5,254 crore.

 

RailTel serves as the digital transformation partner of the Ministry of Railways, undertaking ambitious projects aimed at modernising Indian Railways through programs like NIC e-Office solution across 236 units, Public Wi-Fi at 6,108 stations, IP-based Video Surveillance Systems at 5,000+ railway stations, among others.