Railway stocks, including Ircon, IRFC, and RVNL, experienced significant gains of up to 13 percent on January 20, extending their remarkable performance ahead of the upcoming Interim Budget on February 1.
With the anticipation of Narendra Modi’s potential return to power after the general elections, analysts foresee a continued emphasis on infrastructure-led growth and ‘Make in India’ initiatives in government policies. The market is closely monitoring the expected high allocation towards railways in the budget.
One standout performer in this sector is IRFC, witnessing an impressive rally of nearly 50 percent this month alone. Over the past year, it has soared over 300 percent, outpacing the Nifty 50 benchmark, which saw a comparatively modest increase of around 20 percent during the same period.
IRFC’s shares reached an all-time high of Rs 176.25 on the NSE, contributing to a market capitalization surpassing Rs 2.3 lakh crore. Notably, the stock has doubled investors’ money in just three months, registering a remarkable 128 percent surge during this period and an outstanding 400 percent increase over the past year.
It’s crucial to note the low float of IRFC, with the government holding over 86 percent stake, making the stock susceptible to extreme share price reactions and warranting caution.
RVNL also continued its positive trajectory, marking its 10th consecutive day of trading in the green on January 20. The stock surged 10 percent to achieve a lifetime high of Rs 320.35 on the NSE, supported by robust trading volumes. Over the last year, RVNL has witnessed an impressive rise of 317 percent, with a staggering three-year return of 936 percent.
Other railway stocks, such as Railtel, IRCTC, Texmaco Rail, and Jupiter Wagons, also posted gains of up to 8 percent.
In a recent interview at the World Economic Forum 2024 in Davos, Railway Minister Ashwini Vaishnaw highlighted significant progress in the expansion and modernization of the railways. He emphasized achievements like adding 5,200 km of new tracks in the past year and an ambitious goal of laying 15 km of tracks per day. Vaishnaw mentioned that 77 percent of the Rs 2.4-lakh-crore capital expenditure plan has been completed.
Looking ahead to the Interim Budget, Mukesh Kochar, National Head of Wealth at AUM Capital, noted the government’s consistent focus on infrastructure development and expressed expectations for continued emphasis on assets such as roads, airports, ports, and railways. He highlighted the significance of this interim budget, considering the expectations of the ruling government returning to power.