2024-07-06 04:30:02
Railway stocks jumped up sharply in today’s session, with the majority of them hitting fresh record highs. Leading the charge were stocks like Rail Vikas Nigam (RVNL), IRCON International, RailTel Corporation, IRCTC, and IRFC, all of which surged by up to 18%.
RVNL shares hit a fresh record high of ₹498.50 apiece by rallying 18%. This significant surge followed RVNL’s agreement with Delhi Metro Rail Corporation to participate in upcoming infrastructure projects both domestically and internationally.
RVNL will serve as a project service provider for various sectors, including metro, railways, high-speed rail, highways, mega bridges, tunnels, institutional buildings, workshops, depots, S&T works, and railway electrification.
On June 3rd, the company announced its success as the lowest bidder for a project valued at ₹1.32 billion from India’s Central Railway. The contract involves modifying overhead equipment to upgrade an existing 1 x 25 kV electric transmission system to a 2 x 25 kV AT feeding system in the Wardha-Ballarshah Section of the Nagpur division.
During June, the company secured multiple orders, including a significant one from Central Railway worth ₹132 crore. Year-to-date, the stock has delivered an impressive return of 173%.
Similarly, shares of IRCON International jumped 13% in today’s trade to hit a fresh all-time high of ₹316 apiece. The increase followed the company, in partnership with a joint venture, securing an order from Rail Vikas Nigam.
The order entails the design, supply, installation, testing, and commissioning of a broad gauge ballastless track (BLT) and the supply of ballast for a section between Rishikesh and Karanprayag in Uttarakhand, totaling 125 km. The order is valued at ₹750 crore. In 2024, the company’s shares have delivered an impressive return of 82% so far.
RailTel Corporation witnessed a 10% surge, reaching a new record high of ₹534.40 per share in today’s session, after securing an order worth ₹23.96 crore from Webel Technology. The order involves the upgrade and enhancement of existing IT & non-IT DC infrastructure at WBSDC Monibhandar.
This marks the fifth order win for RailTel in less than a month. In the current year so far, the shares have delivered a return of 56%.
Simultaneously, Indian Railway Finance Corporation (IRFC) saw its shares rise by 7% to ₹191.70 apiece. IRFC plays a crucial role in supporting the Indian Railways Infrastructure Development Plan, serving as the primary market borrowing arm to meet their entire extra budgetary resource requirements for capital expenditure funding.
IRCTC shares also surged by 2% to ₹1,034 apiece in today’s trading session. As the sole entity authorised by the Indian government, IRCTC provides online railway tickets, catering services, and packaged drinking water at railway stations and on trains across India.
On fast track
Railways capex is gathering momentum. From rolling stocks to the construction of lines, and railway station development, the sector is teeming with opportunities. The National Rail Plan till 2051 aims to spend ₹9.2 trillion during FY26E–31E as against ₹5.8 trillion during FY21–26E.
Significant business opportunities emerge both on the passenger as well as freight sides of the business, with large capex lined up on Vande Bharat train procurement, Metro capex, and the freight side of the business, where the government intends to increase its freight market share in logistics from the current 27% to 45% by 2030.
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