Synopsis:
Railway stocks are important for investors because the railway sector is a key part of a country’s infrastructure and economy. Railways efficiently connect industries, businesses, and people, supporting trade and transportation across regions. Investing in railway stocks can offer steady returns, benefit from government initiatives, and tap into long-term growth driven by freight, passenger services, and infrastructure expansion.
Ircon International and Rail Vikas Nigam Limited are key players in India’s railway infrastructure industry. Both companies enjoy government support and benefit from the ongoing expansion of the country’s railway network, making them appealing to investors.
1. Rail Vikas Nigam Limited
The company works on a wide range of railway infrastructure projects, such as building new railway lines, adding extra tracks, converting tracks to different gauges, electrifying railways, and developing metro systems.
It also handles the construction of workshops, major and cable-stayed bridges, and production units. Additionally, the company shares freight revenue with the Railways according to agreements made with the Ministry of Railways.
With a market capitalization of Rs.71,818.52 crore, the shares of Rail Vikas Nigam Limited closed at Rs.344.45, up by 1.25 percent from the previous close of Rs.340.20.
In Q1 FY26, the company reported revenue of Rs.3,909 crore, down from Rs.4,074 crore in Q1 FY25. Revenue CAGR for 5 years is 7 percent. Net profit also declined to Rs.134 crore from Rs.224 crore. Net profit CAGR for 5 years is 11 percent.
The company’s return on equity is 14 percent, and return on capital employed is 14.7 percent. P/E ratio of the company stands at 62.05, with the industry average of 21.09.
In the latest quarter, RVNL received fresh orders worth about Rs. 1,000 crore, mainly from civil and electrical engineering works. With these additions, the company now has around 96 active contracts.
The residual value of projects secured through open bidding stands at nearly Rs. 60,500 crore, while its legacy railway projects contribute another Rs. 41,000 crore. This takes RVNL’s total order book to approximately Rs. 1,01,000 crore, providing strong revenue visibility going forward.
For FY25, RVNL reported total revenue from products and services at Rs. 19,909.06 crore, while total revenue including other income stood at Rs. 19,923.02 crore. A major share of the revenue, about 98%, was generated from domestic operations at Rs. 19,557.48 crore, with the remaining 2% or Rs. 351.58 crore coming from foreign operations.
Sector-wise, the railway segment dominated the revenue mix, contributing around 94% of the total. Other sectors contributed on a smaller scale, with energy at 2%, highways at 1.6%, ports at 1.8%, and others at 0.9%. This clearly indicates that for FY25, the company’s revenue base was largely driven by railway projects.
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2. Ircon International Limited
Ircon International Limited is a construction and engineering company that works on a wide range of infrastructure projects, including railways, highways, bridges, flyovers, tunnels, metro systems, railway electrification, aircraft hangars, high-voltage substations, runways, and electrical and mechanical works.
The company provides Engineering, Procurement, and Construction services on a turnkey basis, handling projects from design and planning to execution and completion.
With a market capitalization of Rs.16,341.46 crore, the shares of Ircon International Limited closed at Rs.173.75,up by 1.58 percent from the previous close of Rs.171.05
In Q1 FY26, the company reported revenue of Rs. 1,786 crore, down from Rs. 2,287 crore in Q1 FY25. Revenue CAGR for 5 years is 15 percent. Net profit also declined to Rs. 164 crore from Rs.224 crore. Net profit CAGR for 5 years is 5 percent.
In FY25, the company reported revenue of Rs.10,760 crore, down from Rs.12,514 crore in FY24. Net profit slipped to Rs. 728 crore from Rs. 930 crore.
The company’s return on equity is 11.3 percent, and return on capital employed is 11.6 percent. P/E ratio of the company stands at 24.82, with the industry average of 20.83.
As of June 30, 2025, the company’s order book stood at Rs. 20,973 crore. The sectoral distribution shows that railways dominate with 75% of the total orders valued at Rs. 15,724 crore, followed by highways contributing 20% or Rs. 4,234 crore, while other sectors account for the remaining 2% at Rs. 1,015 crore.
In terms of geography, domestic projects form the bulk at 90% of the order book, worth Rs. 18,793 crore, whereas international projects contribute 10% or Rs. 2,180 crore. Looking at the mode of award, 63% of the orders (Rs. 13,155 crore) were secured through competitive bidding, while 37% (Rs. 7,818 crore) came through nomination. This reflects a strong order pipeline with a healthy share of competitively won projects, ensuring growth visibility.
For FY2025, the company reported a total operating income of Rs. 10,193.14 Crore. The Sector Wise Performance was heavily dominated by the Railways segment, which contributed Rs. 8,252.97 Crore, accounting for 80.97% of the total, followed by the Highways segment with Rs. 1,871.31 Crore (18.36%), and the Others segment contributing a minimal ₹68.86 Crore (0.67%). In terms of Segment Wise Performance, revenue was overwhelmingly sourced Domestically at Rs. 9,854.04 Crore, representing 96.67% of the income, with the Foreign segment contributing the remaining Rs. 339.10 Crore, or 3.33%
Conclusion
Both Rail Vikas Nigam Limited and Ircon International Limited are key players in India’s railway infrastructure sector, backed by strong government support and a robust order book.
While recent quarters have seen a slight dip in revenues and profits, their long-term growth potential remains strong due to ongoing railway expansion, strategic projects across other infrastructure segments, and a significant share of competitively secured orders. These factors make both companies attractive options for investors seeking exposure to India’s infrastructure and transport growth story.
Written By Jhanavi Sivakumar
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