Railway stocks in focus; RailTel, RVNL, Texmaco, RITES zoom up to 13%

Shares of railway related sectors rallied up to 13 per cent on the BSE in Friday’s intra-day trade backed by heavy volumes in an otherwise weak market on strong growth visibility.

RailTel Corporation of India, Texmaco Rail & Engineering, IRCON International, RITES, Rail Vikas Nigam (RNVL) and Titagarh Rail Systems (TRSL) rallied between 5 per cent and 13 per cent. In comparison, the BSE Sensex was down 0.55 per cent at 77,049 at 12:42 pm. These stocks have bounced back up to 58 per cent from their respective lows touched on June 5. Click here to connect with us on WhatsApp

Indian Railways (IR) plans to achieve 100 per cent railway route electrification by 2024-25. IR plans to establish ~500 multi-modal cargo terminals under the ‘PM GatiShakti’ programme, with an estimated outlay of Rs 50,000 Crore in four-five years.

IR plans to procure 150,000 freight cars by 2025. The strong infra spend by the government is flowing down to rolling stock, where wagon manufacturers have received orders exceeding the total of the last 10 years.

Among individual stocks, RailTel Corporation of India surged 13 per cent on the BSE in intra-day trade after the company said it has received the work order from South Central Railway for Telecommunication works for provision of IP-MPLS in 523RKM of Secunderabad division of South Central Railway amounting to Rs 20.22 crore.

Thus far in the month of June, RailTel has received total orders worth of Rs 137 crore including Rs 81.45 crore from National Informatics Centre Services Incorporated for supply, installation, configuration, commissioning & integration of ICT infrastructure and operation and maintenance of the ICT infrastructure in compliance with the SLA.

The stock price of RailTel has bounced back 46 per cent from its June 5 low of Rs 335.10 on the BSE. It had hit a 52-week high of Rs 491.15 on February 28. The average trading volumes at the counter jumped more than three-fold. A combined 41.44 million shares changed hands on the NSE and BSE.

Shares of RVNL soared 8 per cent to Rs 417.40 on the back of a near four-fold jump in the average trading volumes. A combined 63.3 million shares changed hands on the NSE and BSE.

RVNL has an order book of Rs 85,000 crore. In FY23-24 the company had participated in 142 numbers of bids costing around Rs 65,000 crore. For FY24-25 the company will be participating in more than 150 bids costing more than Rs 75,000 crore. Success rate is Rs 20,000 crore, RVNL said in FY24 investor presentation.

Shares of Texmaco Rail & Engineering rallied 8 per cent to Rs 222.30 on back of an over two-fold jump in average trading volumes. A combined 9.13 million shares changed hands on the NSE and BSE. The company is engaged in the manufacturing, selling and providing service for rail and rail related products.

Indian Railways' fast-track approach and the government's push for Atmanirbhar Bharat have catalysed the company to chart new frontiers. A steady rise in the demand for wagons from the Indian Railways helped improve the company’s operational performance.

The order book of the company as on date is more than 14,000 wagons and it is continuously coming. There are around 15,000 plus wagon orders already floated by railway and the company has keenly participated in those. Around 17,000-plus wagon tenders have been floated by the private companies. So the management believes that consistency of 14,000, 15,000 minimum per annum would be there.

In this financial year, the management feels that another 20,000, 25,000 tender is expected to come. Other than that, there is a significant growth in the private wagon requirement. With the push by the government in the infrastructure segment, there is a requirement of specialized wagons in terms of cement industry and steel manufacturing companies. And also along with this, the movement of coal, of utmost focus by the government and by all stakeholders,” Texmaco Rail said in the Q4FY24 earnings conference call.