Today, we recommend two stocks, one from the railway financing sector and another from the energy sector, recommended by the Trade Brains Portal, to buy for an upside potential of more than 30%. Up until 2035, India’s energy consumption could rise sharply due to industrialization, economic expansion, urbanization, and rising incomes. The energy sector is crucial for fulfilling India’s development goals, which include building infrastructure and providing energy to different sectors.
Moreover, the Union Budget 2025-26 allocated a capital expenditure budget of Rs 2.65 lakh crore towards Indian Railways, aimed at achieving 100% electrification, expanding high-speed rail corridors, and station redevelopment projects. The Indian railway sector, one of the largest railway networks globally, plays a pivotal role in driving economic growth, enabling trade, and fostering social inclusion. We also analyzed the market’s performance on Monday to understand what may lie ahead for the stock indices in the coming days.
1. Indian Railway Finance Corporation (IRFC)
- Current price: ₹134
- Target price: ₹175
- Upside: 30.4%
- Time frame: 16 – 24 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
The Indian Railway Finance Corporation (IRFC), a Navratna Public Sector Enterprise established in 1986, is administered by the Ministry of Railways. Its main duty is to raise capital from the financial markets to fund the acquisition or development of assets, which are subsequently leased to Indian Railways. Many companies in the industry, such as Rail Vikas Nigam Limited (RVNL), RailTel, Konkan Railway Corporation Limited (KRCL), and Pipavav Railway Corporation Limited (PRCL), have received financial support from IRFC in addition to the railways. The company’s assets under management (AUM) were valued at Rs 4.6 lakh crore as of March 31, 2025.
IRFC’s net interest income increased by 2.2% from Rs 6,429 crore in FY24 to Rs 6,569 crore in FY25. Additionally, its net interest margin improved by 4 bps, going from 1.38% to 1.42% over the preceding year. IRFC approved Rs 5,700 crore worth of loans for FY25, including Rs 700 crore for NTPC and Rs 5,000 crore for NTPC Renewable Energy Ltd. The company also secured a rupee term loan arrangement worth Rs 5,000 crore with NTPC REL and became the first bidder for Rs 3,167 crore in funding for the building of the Banhardih Coal Block in Jharkhand’s Latehar District.
In FY25, the company received Navratna status from the Department of Public Enterprises, and it seeks Maharatna status shortly. Additionally, the IRFC board approved NTPC’s financing of 20 BOBR rakes on a finance lease basis up to Rs 700 crore under Indian Railways’ General Purpose Waggon Investment Scheme (GPWIS).
A lease arrangement for 8 BOBR rakes, valued at more than Rs 250 crore, was also signed with NTPC Ltd. in January 2025. A Memorandum of Understanding has also been inked by IRFC and REMCL to collaboratively explore financing options for Indian Railways’ renewable energy projects, including potential funding in the nuclear, thermal, and renewable energy sectors.
Risk factor
The whole loan book of IRFC is owned by the Ministry of Railways (MoR) and its affiliates. As of March 31, 2025, 62% of the total consisted of lease receivables from the MoR, 37% consisted of advances for leased railway assets, and 1% consisted of loans to companies like NTPC and RVNL. Since the company’s growth is closely related to the MoR’s investment plans for Indian Railways, it is vulnerable to changes in finance or policy. Furthermore, because of its reliance on market borrowings, IRFC is susceptible to fluctuations in interest rates.
2. Mahanagar Gas Ltd (MGL)
- Current price: ₹1,516
- Target price: ₹1,750
- Upside: 15.43%
- Time frame: 16 – 24 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Mahanagar Gas Limited, one of the leading City Gas Distribution (CGD) companies in India, was established in 1995 and provides a comprehensive range of services to fulfill the diverse demands of its customers in the Geographical Areas (GAs) in which it operates. Its infrastructure, which includes more than 7,460 km of pipeline and 385 CNG stations, serves more than 2.83 million PNG households and 1.11 million CNG vehicle users. Over the last 30 years, MGL has been crucial in developing gas infrastructure and promoting gas use among various consumers in the Mumbai Metropolitan Region (MMR), which includes Mumbai, Urban Thane, Navi Mumbai, Kalyan, and other areas.
Revenue for FY25 was Rs 6,924 crore, up 10.87% from FY24’s Rs 6,245 crore, according to the company. Over the past four years, it has grown at a 34% CAGR. EBITDA was Rs 1,510 crore, while gross profit was Rs 2,466 crore. The gross margin was Rs 16.51/SCM, which was more than the FY22 gross margin of Rs 13.61/SCM. The average sales realization was Rs 46.54/SCM, higher than FY21’s Rs 26.42/SCM. Over the past four years, PAT has grown at a 14% CAGR to reach Rs 1,045 crore. As of FY25, ROE was 18.94%.
The company’s objective is to increase the number of PNG and CNG customers in every location. As more OEMs get ready to launch CNG-based vehicles, the market share of CNG will increase. The company plans to invest about Rs 150 crore in MGL’s subsidiary, UEPL, and Rs 1,300 crore in FY26. PNG, including pipes, would cost about Rs 500 crore, while CNG would cost about Rs 300 crore. There are plans to build 180 km of steel pipeline and 250 CNG filling stations in the next five years. The company is expanding into several energy-related subsegments and has made several acquisitions and collaborations to diversify into new markets or strengthen its existing ones.
Risk Factor
The company’s project implementation can be impacted by delays caused by prolonged authorization processes. To streamline the procedure, CNG stations and more pipeline infrastructure would need to be installed. Additionally, it is challenging for the company to set up new CNG stations in its operational locations due to high prices and a shortage of suitable land.
Market Recap 21st July, 2025
The Nifty 50 index opened at 24,999 on Monday, up by 31 points from Friday’s closing of 24,968. The index gradually moved upwards throughout the day, reaching an intraday high of 25,111. It traded above the 50/100/200 EMAs but below the 20 EMA in the daily time frame. Its RSI stood at 47.63, well below the overbought zone of 70.
BSE Sensex also had a similar start, opening at 81,918, up by 160 points from the previous close of 81,758. Strong quarterly profit reports from large private sector banks were the main driver of Monday’s bullish momentum. After achieving better results, HDFC Bank and ICICI Bank saw a 2.8% increase in value. The Bank Nifty ended with gains at 56,952.75, up 669.75 points, or 1.2%.
On Monday, the majority of the sectoral indices were up, with only a few losers. One of the major gainers was the Nifty Finance Index, which ended the day at 26,990, up 434.75 points, or 1.64%. Finance and banking stocks like ICICI Bank Ltd., which rose 2.8%; HDFC Bank Ltd., which increased 2.2%; and ICICI Lombard General Insurance, which increased 2% on Monday, all contributed to the index’s increase. The Nifty Private Bank Index also closed with gains at 27,888, up 354.45 points, or 1.3%. The Nifty Service Index followed the lead, closing at 33,129, up 368.10 points, or 1.1%. Major stocks like Eternal, ICICI Bank, and Infoedge gained up to 4%.
However, the Nifty Oil & Gas Index closed at 11,643, down -128.80 points, or -1.09%. Heavyweights including Reliance Industries, Gujarat State Petronet, and Gujarat Gas pulled the index down, with Reliance being the major loser, falling by 3.14%. The drop comes after the European Union increased penalties on the shadow fleet that transports Russian oil and lowered the price cap on Russian oil. The Nifty PSU Bank Index was another big loser, closing at 7,121.15, down -41.35 points, or -0.58%.
On Monday, Asian markets had an overall positive trend. Hong Kong’s Hang Seng gained 168.48 points, or 0.67%, reaching 24,994.14. South Korea’s Kospi ended the day at 3,210.81, up 22.74 points, or 0.71%. Shanghai’s Composite Index ended the day up 25.31 points, or 0.71%, to close at 3,559.79. On the US stock exchange, Dow Jones Futures were up 87.9 points, or 0.2%, at 44,430.09 at 4:40 p.m. IST.
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