The Indian Railways received a gross budgetary support of Rs. 2.52 lakh crore, which reflects an increase of 5 percent from the previous year. This funding is aimed at enhancing the railway infrastructure and services.
The total capital expenditure (capex) for the railways was set at Rs. 2.62 lakh crore, marking an 11.1 percent rise compared to the interim budget presented earlier in 2024.
Railway Minister Ashwini Vaishnaw stated that out of the total budget allocation, Rs. 1.08 lakh crore will be used to boost railway safety in 2024-25, focusing on upgrading old railway tracks, improving signalling systems, creating flyovers and underpasses, and installing the Kavach automated safety system on the Indian Railway network.
Following are the three railway stocks to hold for the next five years:
Titagarh Rail Systems Limited
With a market cap of Rs. 15,390.5 crores, the shares of India’s largest wagon-maker moved up by nearly 2.7 percent on BSE to Rs. 1,177.1 on Monday.
The company experienced significant growth in its revenue from operations, with a year-on-year rise of 13 percent from Rs. 935 crores in Q2 FY24 to Rs. 1,057 crores in Q2 FY25. Similarly, the net profit grew by nearly 20 percent from Rs. 71 crores to Rs. 81 crores, over the same period.
Further, in the last 3 years, the company has turned its net profit from a loss of Rs. 19 crores in FY21 to a profit of Rs. 286 crores in FY24.
As of Q2 FY25, Titagarh Rail’s total order book stood at Rs. 25,533 crores. This includes Rs. 12,207 crores in direct orders to the company and Rs. 13,326 crores from joint ventures (JVs).
The direct orders of Rs. 12,207 crores include Freight Rolling Stocks, which account for 56.1 percent with orders valued at Rs. 6,848 crores, while Passenger Rolling Stocks, make up the remaining 43.9 percent with orders totalling Rs. 5,359 crores.
Titagarh Rail is a market leader with nearly 30 percent share in freight wagons and is the largest wagon manufacturer in India. It is the only Indian company that manufactures both wagons and coaches.
The stock has delivered positive returns of nearly 54 percent in one year, as well as around 10 percent returns year-to-date.
Established in 1997, Titagarh Rail Systems Limited is mainly engaged in the business of manufacturing and selling freight wagons, passenger coaches, metro trains, train electricals, steel castings, specialised equipment & bridges, ships, and more.
RailTel Corporation of India Limited
With a market cap of Rs. 12,969 crores, the shares of this Navratna PSU of the Government of India moved up by nearly 3 percent on BSE to Rs. 407.4 on Monday.
The company experienced significant growth in its revenue from operations, with a year-on-year rise of around 40 percent from Rs. 429 crores in Q2 FY24 to Rs. 599 crores in Q2 FY25. Similarly, the net profit grew by 23.6 percent from Rs. 55 crores to Rs. 68 crores, over the same period.
Further, the net profit of RailTel Corporation increased by a CAGR of nearly 21 percent to Rs. 246 crores in FY24, as against Rs. 140 crores in FY21.
As of July 2024, RailTel’s order book stood at Rs. 4,682 crores. Of this total, Government Nomination orders account for 22.4 percent with a value of Rs. 1,047 crores, while Tender orders make up the majority at 75.7 percent, totalling Rs. 3,546 crores. Private orders contribute the remaining 1.9 percent, amounting to Rs. 90 crores.
The total income of RailTel Corporation increased by a CAGR of 29 percent to Rs. 2,622 crores in FY24, as against Rs. 1,578 crores in FY22.
For FY25, the company expects to secure Rs. 4,000–5,000 crore in new orders from tenders issued by Indian Railways, state governments, and various sectors. Further, projected orders from the KAVACH project, valued between Rs. 5,000 crore and Rs. 7,000 crore, are anticipated to significantly boost the order book.
The management aims for a 30 percent revenue growth in FY25, following a strong 31 percent growth in FY24. The revenue increase will be fueled by telecom services, projected to grow by 9-10 percent, while project revenues are expected to contribute around Rs. 2,000 crores.
The stock has delivered positive returns of nearly 83 percent in one year, as well as around 14.5 percent returns year-to-date.
Incorporated in 2000, RailTel Corporation of India Limited is one of the largest neutral telecom infrastructure providers in India owning a Pan-India optic fibre network on exclusive Right of Way (ROW) along Railway track.
RailTel is at the forefront of providing nationwide Broadband Telecom & Multimedia Networks in all parts of India in addition to the modernisation of Train operations and administration network systems.
The company also offers a range of passenger services including content-on-demand services and Wi-Fi, across India’s major railway stations.
Rail Vikas Nigam Limited (RVNL)
With a market cap of Rs. 90,218.8 crores, the stock moved up by 4 percent on BSE to Rs. 436.4 on Monday.
The company experienced a decline in its revenue from operations, with a year-on-year fall of around 26.8 percent from Rs. 5,572 crores in Q1 FY24 to Rs. 4,074 crores in Q1 FY25. Similarly, the net profit decreased by 34.7 percent from Rs. 343 crores to Rs. 224 crores, over the same period.
Further, the net profit of RVNL increased by a CAGR of 17 percent to Rs. 1,574 crores in FY24, as against Rs. 992 crores in FY21.
As of Q1 FY24, RVNL has a remarkable order book of over Rs. 85,000 crores, with a concentration on railway, metro, and international projects. This large order book, which is almost four times the trailing twelve-month sales, guarantees great future revenue visibility.
Despite a flat revenue estimate for FY25, RVNL expects an 8 percent YoY revenue rise, with a target of Rs. 17,700 crores in the coming quarters. Recent project wins, including orders from Central Railway and Maharashtra Metro Rail Corporation, bolster RVNL’s development potential and execution ability.
The company management expects an order inflow of around Rs. 20,000 to Rs. 25,000 crores in FY25 and aims to maintain the order book at three to four times the annual turnover.
The stock has delivered multibagger returns of nearly 177 percent in one year, as well as around 137.6 percent returns year-to-date.
Rail Vikas Nigam Limited works as the construction arm of the Ministry of Railways (MoR) for project implementation and transportation infrastructure development.
The company is engaged in executing various railway projects, including new lines, doubling, gauge conversion, railway electrification, workshops, metro projects, bridges, construction of cable-stayed bridges, and institution buildings.
Written by Shivani Singh
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