On Friday, the Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, approved eight significant railway projects with a total investment of approximately Rs. 24,657 crore.
These projects are aimed at enhancing railway connectivity, particularly in the Eastern states of India, and are expected to cover about 900 kilometres. These projects are expected to be completed by the 2030-31 fiscal year.
Moreover, the eight projects cover 14 districts across seven states- Odisha, Maharashtra, Andhra Pradesh, Jharkhand, Bihar, Telangana, and West Bengal and will extend the Indian Railways network by 900 kilometres.
In addition, 64 new stations will be constructed as part of the projects, improving connectivity to six Aspirational Districts (East Singhbum, Bhadradri Kothagudem, Malkangiri, Kalahandi, Nabarangpur, and Rayagada), approximately 510 villages, and around 40 lakh people.
As per the reports, the proposed projects will improve logistical efficiency by connecting the unconnected areas and enhancing transportation networks, resulting in streamlined supply chains and accelerated economic growth.
Listed below are the railway stocks that may benefit from the above-mentioned Government initiatives:
Rail Vikas Nigam Ltd
With a market capitalization of Rs. 1,19,127 crores, the shares of the company that specializes in infrastructure development for the Indian railway network started Monday’s trading session on a higher note at Rs. 524 compared to its previous close of Rs. 518.15. During the trading session, the shares hit a high of Rs. 583, gaining around 15 percent and closed the day at Rs. 575 apiece.
Looking at the company’s financial performance, the revenue decreased by 39 percent from Rs. 6,714 crores during the March quarter to Rs. 4,074 crores in the June quarter. On the other hand, the net profits declined by around 53 percent from Rs. 478 crores to Rs. 224 crores during the same period.
Indian Railway Finance Corporation Ltd
With a market capitalization of Rs. 2,40,983 crores, the shares of the financing company started Monday’s trading session on a flatter note at Rs. 180 compared to its previous close of Rs. 179.79. During the trading session, the shares hit a high of Rs. 187.45, gaining around 3 percent and closed the day at Rs. 185 apiece.
Looking at the company’s financial performance, the revenue decreased by 4 percent from Rs. 6,737 crores during the December quarter to Rs. 6,474 crores in the March quarter. On the other hand, the net profits increased by 7 percent from Rs. 1,599 crores to Rs. 1,717 crores during the same period.
As of March 2024, IRFC’s total AUM stood at Rs. 4,64,641.28 crores. The company has a minimal credit risk exposure, with 98.94 percent of its AUM being exposed to the Ministry of Railways (MoR).
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Ircon International Ltd
With a market capitalization of Rs. 25,676 crores, the shares of the construction company started Monday’s trading session on a flatter note at Rs. 264.55 compared to its previous close of Rs. 264.60. During the trading session, the shares hit a high of Rs. 276.60, gaining around 4 percent and closed the day at Rs. 272 apiece.
Looking at the company’s financial performance, the revenue decreased by around 40 percent from Rs. 3,787 crores during Q4FY24 to Rs. 2,287 crores in Q1FY25. On the other hand, the net profits declined by around 9 percent from Rs. 247 crores to Rs. 224 crores during the same timeframe.
Railtel Corporation of India Ltd
With a market capitalization of Rs. 15,468 crores, the shares of the PSU company started Monday’s trading session on a flatter note at Rs. 470 compared to its previous close of Rs. 469.45. During the trading session, the shares hit a high of Rs. 492.95, gaining around 3 percent and closed the day at Rs. 482 apiece.
Looking at the recent financial statements, the revenue increased by around 28 percent from Rs. 468 crores in the March quarter to Rs. 599 crores in the June quarter. In addition, the net profits zoomed by around 79 percent from Rs. 38 crores to RS. 68 crores during the same period.
Note: Railway stocks have recently experienced a decline due to disappointing results affecting their previous upward momentum. As of Friday’s closing, the shares of RVNL had fallen nearly 20 percent from their peak levels. Similarly, shares of IRCON and IRFC had decreased by 15 percent and 22 percent, respectively, from their highs reached in mid-July.
Written By Vaibhav Patil
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