Best Railway Stocks With High Mutual Fund Holdings: The Indian Government announced a budget of Rs. 2.4 Lakh Cr for The Indian Railways in its FY24 Union Budget. The Railways are like the veins of the country, connecting states, making it very economical to transport goods across India as well as to the ports, from where they will be exported to the world.
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Best Railway Stocks With High Mutual Fund Holdings
This industry is projected to see major developments. Today we will be talking about a few Companies that are set to benefit greatly from this development. We will look at what these Companies do, and what kind of development is the industry looking at.
Then we will take a look at how much stake have Mutual funds picked up in them and which are the major funds owning shares of these companies.
Railway Stocks with High Mutual Fund Holdings #1 – Titagarh Rail Systems
Titagarh is a renowned provider of integrated mobility solutions, with substantial operations in India and Italy. With state-of-the-art factories in both countries, the Company meets the diverse requirements of passenger and freight rolling stock.
Titagarh specializes in developing cutting-edge transportation solutions like as semi-high-speed trains, urban metros, passenger coaches, propulsion equipment, and a diverse range of wagons, including specialty ones.
Titagarh ventured into freight wagon manufacturing in 1997. The Company became a leader in the market by integrating its business of manufacturing steel casting for Indian railways to venturing into areas of rolling stock. The term rolling stock refers to every vehicle that moves on a railway system, including locomotives, coaches, wagons, and everything.
This forward integration of its existing business of manufacturing steel castings for Indian Railways enabled Titagarh to establish itself as the leader in the Indian market. Titagarh is a transnational powerhouse in end-to-end solutions for the Freight Rail Systems industry.
It also has business interests in shipbuilding, bridges, and defense (SBD). Titagarh has constructed and consistently delivered world-class specialized ships for the Indian Navy and manufactured Defence equipment for the country.
Additionally, Titagarh provides modular bridging solutions to remote areas. The Freight Rail Systems segment generates a major contributor to Titagarh’s topline. In FY23, Titagarh reported a revenue of Rs. 2780 Cr which nearly doubled from Rs. 1467 Cr in FY22. The Company went from reporting a loss of Rs. 68 Lakh in FY22 to a net Profit of Rs. 126 Cr in FY23.
The stock of Titagarh Rail Systems is owned by multiple large fund houses such as HDFC Large & Mid Cap fund which holds a 5.16% stake and Canara Robeco Fund which owns 2.02%. Collectively Mutual Funds own 10.35% of the Company.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 955.25 | Market Cap (Cr.) | ₹ 13,994.00 |
| EPS | ₹ 11.63 | Stock P/E | 66.02 |
| RoE | 21.29% | RoCE | 19.54% |
| Promoter Holding (%) | 42.50% | FII Holding (%) | 20.00% |
| Debt to Equity | 0.22 | Price to Book Value | 6.71 |
| Operating Profit Margin (%) | 11.09% | Net Profit Margin (%) | 3.72% |
Also, take a look on Fundamental Analysis Of Titagarh Rail Systems
Railway Stocks with High Mutual Fund Holdings #2 – Texmaco Rail & Engineering
Texmaco is a multi-unit engineering & infrastructure Company involved in the business of manufacturing Rolling Stock such as wagons, Coaches, EMUs, Loco shells & parts. The Company also manufactures Hydro Mechanical equipment, Steel Castings, Rail EPC, Bridges, and other steel structures.
Over the years, the Company has entered into technical collaborations with renowned Multinationals in Japan, the U.S.A, the U.K., Germany, Australia, Austria, Holland, etc. to develop and expand its product portfolio.
TEXMACO also has extensive experience in forming technological partnerships with well-known companies around the world. The Company’s Steel Foundry, the largest in the country, can produce up to 42000 tons of quality castings each year. It has a cutting-edge facility designed by the world-renowned multinational corporation M/s.Kunkel Wagner of Germany.
The Foundry has received the Quality Assurance Certificate (M-1003) from AAR (Association of American Railroads), making it the only Foundry in India qualified to export railway castings to the North American market.
Texmaco reported a revenue of Rs. 2243 Cr in FY23, which increased by 38% from Rs. 1622 Cr in FY22. Net Profits of the Company also increased by 26% from Rs. 21 Cr in FY22 to Rs. 26 Cr in FY23.
Texmaco Rail & Engineering is the second most preferred stock among mutual funds, with a 6.91% holding in the company. The top fund houses are HDFC Balanced Advantage Fund and Nippon India Small Cap Fund own 2.68% and 2.86% of the Company respectively.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 173.40 | Market Cap (Cr.) | ₹ 8,349.11 |
| EPS | ₹ 0.81 | Stock P/E | 128.12 |
| RoE | 1.43% | RoCE | 4.23% |
| Promoter Holding (%) | 48.10% | FII Holding (%) | 11.20% |
| Debt to Equity | 0.73 | Price to Book Value | 3.84 |
| Operating Profit Margin (%) | 3.51% | Net Profit Margin (%) | 0.88% |
Railway Stocks with High Mutual Fund Holdings #3 – RITES
RITES is a Schedule A Navratna Central Public Sector Enterprise under the Ministry of Railways, incorporated on April 26, 1974. It is a multidisciplinary engineering & consultancy organization, providing a comprehensive range of services from concept to commissioning in all facets of transport infrastructure and related technologies.
The Company is a leading player in India’s transport consultancy and engineering sector, providing diverse services under one roof. RITES is uniquely placed in terms of diversification of services and geographical reach in various sectors such as railways, highways, metros, tunnels, bridges, airports, ports, ropeways, and inland waterways.
With a nearly five-decade-long journey, RITES has established itself as a preferred choice for clients in more than 55 countries across Asia, Africa, Latin America, and the Middle East regions. The firm is Indian Railways’ export arm for rolling stock (which includes locomotives, carriages, and trainsets).
It is aligned with the Government of India’s thrust on sustainable mobility with significant, long-term, social, and environmental benefits. By maintaining a sustainable approach towards operational performance excellence, the organization has been able to demonstrate the ability of efficient execution of more than 5000 projects.
Some of the complex projects include — India’s longest road-cum-rail bridge over the Brahmaputra. Metro works in Ahmedabad in Gujarat, Pir Panjal railway tunnel in Jammu & Kashmir, and Machilipatnam Port in Andhra Pradesh.
RITES reported a revenue of Rs. 2628 Cr in FY23, which dropped by 1.28% from Rs. 2662 Cr in FY22. However, Net Profits increased by 5.8% from Rs. 539 Cr in FY22 to Rs. 570 Cr in FY23.
Mutual Funds collectively hold 3.38% of RITES as of March 2024. Some of the big ones include Nippon India Small Cap Fund which owns 2.23% of the Company.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 688.55 | Market Cap (Cr.) | ₹ 16,889.00 |
| EPS | ₹ 22.56 | Stock P/E | 35.09 |
| RoE | 21.64% | RoCE | 29.31% |
| Promoter Holding (%) | 72.20% | FII Holding (%) | 3.22% |
| Debt to Equity | 0 | Price to Book Value | 6.54 |
| Operating Profit Margin (%) | 23.39% | Net Profit Margin (%) | 20.11% |
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Railway Stocks with High Mutual Fund Holdings #4 – Railtel Corporation of India
RailTel is a Mini Ratna Central Public Sector Enterprise, one of the country’s largest neutral telecom infrastructure providers, owning a Pan-India optic fiber network. The OFC network covers important towns & cities of the country and several rural areas.
RailTel was incorporated on September 26, 2000, to modernize the existing telecom system for train control and operations. It also generates additional revenues by creating a nationwide broadband and multimedia network, laying optical fiber cable using the right of way along railway tracks.
The Company has a strategic relationship with the Indian Railways and it undertakes a wide variety of projects including the provision of mission-critical connectivity services like IP-based video surveillance systems at stations. Implementing short-haul connectivity between stations and long-haul connectivity to support various organizations within the Indian Railways.
RailTel also provides various passenger services including content-on-demand services and Wi-Fi across major railway stations in India. Presently, the optic fiber network of RailTel covers over 61000+ route kilometers and covers 6108+ railway stations across India. Its citywide access across the country is 21000+ kms.
RailTel projects have led them to be selected for the implementation of various mission-mode projects for the Government of India including rolling out the National Knowledge Network, Bharat Net (formerly, the National Optical Fiber Network), and USOF-funded optical fiber-based connectivity project in North East India.
The infrastructure developer reported a revenue of Rs. 1964 Cr in FY23, which increased by 27% from Rs. 1548 Cr in FY22. Net Profits however were down 9.5% from Rs. 209 Cr in FY22 to Rs. 189 Cr in FY23.
Mutual Funds collectively hold 2.96% of Railtel Corporation of India as of March 2024. Some of the big ones include Quant Small Cap Fund which owns 2.45% of the Company.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 386.00 | Market Cap (Cr.) | ₹ 12,385.00 |
| EPS | ₹ 5.89 | Stock P/E | 57 |
| RoE | 11.45% | RoCE | 15.43% |
| Promoter Holding (%) | 72.80% | FII Holding (%) | 1.45% |
| Debt to Equity | 0 | Price to Book Value | 7.25 |
| Operating Profit Margin (%) | 16.70% | Net Profit Margin (%) | 9.71% |
Railway Stocks with High Mutual Fund Holdings #5 – Jupiter Wagons
Jupiter Wagons was founded in 2006. The Company is a leading player in the railway wagon manufacturing industry. The Company began its operations by manufacturing freight wagons for the Indian Railways.
Today, it has built a diversified business around manufacturing for Indian Railways. Along with freight wagons, it also produces braking systems and marine containers for domestic and international use.
Jupiter has manufacturing facilities in Jamshedpur, Indore, Jabalpur, and Baddi. The Company can manufacture over 8000 wagons annually. Along with this, it also has multiple partnerships, that allow it to bring the latest Tech to India. Let us take a look at some of these partnerships
- DAKO CZ: The Company’s Partnership with the 205-year-old Company allows Jupiter to manufacture train brake systems for the Indian Railways.
- LAF: The Partnership will allow the Company to manufacture drawbars, draught gear, Heavy-duty transaction devices, and buffers.
- Kovis Kivarna: The partnership gives the Company the expertise in manufacturing brake Discs, Axles, and gearboxes for rolling stock trains.
- Talleres Alegra: A 108-year company with railway track material and equipment expertise. Jupiter will manufacture welded cast steel Crossings for Metro and other trains.
- CAF: The Company will be setting up a railway mass transit system for this Company, to manufacture metro trains.
Apart from these Companies, Jupiter also has partnerships with Tatravagonka Poprad, Budamar Logistics, and TSAW Drones.
Jupiter’s Order book remains strongly supported by clients from across multiple industries like Commercial Vehicles, Railways, and Logistical Companies. As of FY23, the Company has a strong order book of Rs. 58,200 Cr, which would suffice the Company over the next three years.
When we look at the Company’s revenue segments, we realize that its revenue is strongly concentrated towards Railway wagons which brought in ~77% of the revenue and grew by ~99% in a year. A brief breakdown of the Company’s revenue segments as well as its growth is given below.
Jupiter Wagons reported a revenue of Rs. 2068 Cr in FY23, which increased by 76% from Rs. 1178 Cr in FY22. Net Profits jumped by a whopping 143% from Rs. 50 Cr in FY22 to Rs. 121 Cr in FY23.
Mutual Funds collectively hold 1.9% of Railtel Corporation of India as of March 2024. Some of the big ones include Tata Retirement Savings Fund which owns 1.07% of the Company.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 380.00 | Market Cap (Cr.) | ₹ 15,659.00 |
| EPS | ₹ 3.12 | Stock P/E | 58.1 |
| RoE | 16.80% | RoCE | 24.40% |
| Promoter Holding (%) | 70.10% | FII Holding (%) | 1.26% |
| Debt to Equity | 0.35 | Price to Book Value | 14.8 |
| Operating Profit Margin (%) | 13.50% | Net Profit Margin (%) | 6.05% |
List of Other Best Railway Stocks with High Mutual Fund Holdings
The list below puts together 10 Best Railway Stocks with High MF Holdings.
| Name | CMP | Mkt Cap | DII Holding (%) |
|---|---|---|---|
| Titagarh Rail Systems | ₹ 955.25 | ₹ 13,994.00 | 10.35% |
| Texmaco Rail & Engineering | ₹ 173.40 | ₹ 8,349.11 | 6.91% |
| RITES | ₹ 688.55 | ₹ 16,889.00 | 3.38% |
| Railtel Corporation of India | ₹ 386.00 | ₹ 12,385.00 | 2.96% |
| Jupiter Wagons | ₹ 380.00 | ₹ 15,659.00 | 1.90% |
| BEML | ₹ 3,451.00 | ₹ 14,370.00 | 17.26% |
| BHEL | ₹ 257.00 | ₹ 89,402.00 | 5.75% |
| Ramkrishna Forgings | ₹ 689.00 | ₹ 12,453.00 | 1.50% |
| Indian Railway Finance Corporation | ₹ 147.00 | ₹ 191,976.00 | 0.40% |
| Rail Vikas Nigam Limited | ₹ 261.00 | ₹ 54,492.00 | 0.14% |
Read more: Top Railway Stocks With High FII Holdings in 2024
Conclusion
In conclusion, the Indian government’s increased budgetary allocation for the Indian Railways in the FY24 Union Budget is expected to drive significant development in the railway sector. Companies like Titagarh Rail Systems, Texmaco Rail & Engineering, RITES, Railtel Corporation of India, and Jupiter Wagons are well-positioned to benefit from this industry tailwind.
These companies have established themselves as key players in various segments of the railway ecosystem, ranging from rolling stock manufacturing and rail infrastructure development to consultancy services and telecommunication infrastructure.
With their strong product portfolios, technical collaborations, and diversified offerings, these companies are poised to capitalize on the government’s investment in modernizing and expanding the country’s rail network. What are your views about the stocks mentioned above? please let us know in the comment section below.
Written by Nasir Hussain
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