Railway Stocks Show Mixed Performance
Railway stocks like Railtel Corp, Texmaco Rail, and Rail Vikas Nigam saw gains of 1-2 percent on December 17. However, others like Titagarh Rail, Jupiter Wagons, and IRFC experienced slight profit booking, causing their stocks to dip into the red.
Recent Surge
Railway stocks have been in the spotlight recently due to strong optimism about the sector’s growth prospects. In the past month, shares of companies like Railtel Corp, Texmaco Rail, and Rail Vikas Nigam surged 15-26 percent, bouncing back from a 10-34 percent correction in the July-September period.
Factors Driving Interest
Investor interest in railway stocks has been reignited by several factors, including expectations of increased government spending post-elections, the clearing of stalled railway tenders, anticipation of the upcoming Union Budget, and more reasonable valuations.
Recent Developments
In late November, the union cabinet approved three mega railway projects with a capital outlay of Rs 7,927 crore. Additionally, Texmaco Rail secured an order worth Rs 187.41 crore for the construction of nine transmission lines. These projects align with the PM-Gati Shakti National Master Plan for multimodal connectivity, further boosting optimism for investment in the sector.
Analysts believe that weak government spending in the first half of the current fiscal year has set the stage for projects to pick up in the second half of FY25, with stalled railway contracts being released.