Railway stocks alert: IRFC, IRCON, RailTel, RVNL rallied over 5%, freight growth advances

Shares of railway and related companies experienced a rally of up to 13 percent on the BSE during Wednesday’s intra-day trading, driven by expectations of an improved outlook. Notable gains included Jupiter Wagons, which rose 13 percent to Rs 559.60, Titagarh Rail Systems at 9 percent to Rs 1,347, Texmaco Rail & Engineering up 6 percent to Rs 235.60, RailTel Corporation of India also up 6 percent to Rs 461.30, IRFC rising 5 percent to Rs 164.80, Rail Vikas Nigam gaining 5 percent to Rs 482.45, and IRCON International increasing 5 percent to Rs 233.25. In comparison, the BSE Sensex was up 0.13 percent at 81,613 at 11:15 AM.

Many of these stocks had previously corrected by up to 44 percent from their respective 52-week highs reached in July. Indian Railways is currently experiencing unprecedented growth, driven by innovative advancements in both freight and passenger transport.

The construction of new freight corridors and transformative government initiatives are attracting significant private-sector investments in the industry. Key projects, including the Production Linked Incentive (PLI) scheme for train parts, Gati Shakti Inclusion, the redevelopment of railway stations, and the multitracking project, are creating unparalleled opportunities.

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Government initiatives aimed at fostering private sector investments in the railway sector are propelled by several schemes, including the General-Purpose Wagon Investment Scheme (GPWIS), Liberalised Special Freight Train Operations (LSFTO), Automobile Freight Train Operator Scheme (AFTO), and Wagons Leasing Scheme.

The Capital structure of Indian Railways for FY25 stood at Rs 2.62 trillion (22.7 percent of the total budgetary capex), and 2.7 percent more than FY24.

A total of 452 railway projects (including 183 New Line, 42 Gauge Conversion, and 227 Doubling) covering a length of 49,323 km, are in different stages of planning/sanction/execution, at a cost of approximately Rs 7.33 trillion.

Indian Railways is expected to source additional rolling stock to cater to rising volumes as India is emerging as one of the major exporters of coaches and rakes. Implementation of three major railway economic corridors under the PM Gati Shakti program: East Coast, East-West, and North-South sub-corridor, totaling over 4,200 kilometers, will lead to a further increase in demand.

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