The Government of India has been making significant strides in modernizing Indian Railways, with a focus on improving infrastructure, enhancing safety, and upgrading technology. Initiatives include the introduction of high-speed trains, better signaling systems, and electrification of routes. One of the flagship projects is the Vande Bharat Express, a semi-high-speed train designed to offer a more comfortable and faster travel experience. This modernization effort aims to boost economic growth by improving connectivity, reducing travel time, and creating new job opportunities.
Growth Prospects and Beneficiary Stocks
The modernization of Indian Railways presents growth prospects for several sectors, including infrastructure, manufacturing, and technology. Companies involved in rail infrastructure, rolling stock manufacturing, and safety equipment stand to benefit from these developments. Stocks of firms like IRCON International, Indian Railway Catering and Tourism Corporation (IRCTC), and Bharat Heavy Electricals Limited (BHEL) could see a positive impact as the government continues to invest in the railways’ transformation.
Share Price
The shares of IRCON international are trading at Rs. 209.52 up by 3.36% from its previous close of Rs. 202.7 as of January 31, 2025. The stock also touched an intraday high of Rs. 211.39.
Recent Update
Recent Order Awarded to IRCON
IRCON, in a joint venture with AMR, has secured an EPC contract for the construction of rigid pavement and lined drains on selected roads under the Imphal East Division (ED-2). The total road length for the project is 122.209 km, with a project completion timeline of 36 months. The contract was awarded by the Office of the Project Director, Externally Aided Projects (EAP), PWD Manipur, a domestic entity. The total project size is INR 631.2 crore, with IRCON’s share amounting to INR 164.11 crore.
Stake Ownership Arrangement
The project is part of an infrastructure development initiative in Manipur, and IRCON holds a 26% share in the AMRILIRCON JV, with AMR holding the remaining 74%. The contract does not involve any related party transactions, and IRCON has no interest in the entity awarding the contract. The project is expected to be executed within the 36-month timeframe.
Stock Returns
The share of IRCON International Limited has given a return of -11.73% in the last 1 year while the NIFTY 50 Index has given a return of 7.7% during the same period. However, the investors of this stock got a fabulous return of over 372% in 5 years.
About the Company
Ircon International Limited (IRCON), established in 1976, initially focused on railway construction and gradually expanded its portfolio to include large-scale infrastructure projects across various sectors such as railways, highways, and more. Over the years, the company has become an integrated engineering and construction PSU, recognized for managing technologically complex projects.
In 1998, IRCON was awarded Mini Ratna Category-I status and was later elevated to Navratna status by the Department of Public Enterprises in October 2023.
In FY24, the Government of India divested 8% of its stake in the company through an Offer for Sale, reducing its ownership to 65% by September 2024.
IRCON continues to be a key player in the infrastructure sector, driving growth and development through its diverse project offerings.
Written By: Dipangshu Kundu
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