Railway Stocks: With an emphasis on infrastructure spending, the Nifty and Sensex indices increased by almost 1% ahead of the February 1 budget announcement that is today. Considerable value purchasing was done on railway stocks, many of which had experienced steep drops in previous months, with a few less from their highs of 52 weeks by 40%. Let’s learn more about these railway stocks in this article.
Overview of Rail Vikas Nigam Limited
RVNL has more than two decades of distinguished history. Fast-tracking the completion of railway projects was the initial goal in order to close the infrastructure deficit in Indian Railways. With the successful completion of over 150 railway projects and the establishment of several Special Purpose Vehicles (SPVs) to successfully execute new railway projects under the cutting-edge PPP model, RVNL has moved from its initial mandate of “rail infra” projects to the constantly growing opportunities of all infra.
Presently, RVNL is rapidly establishing its presence in every conceivable infrastructure project, both domestically and internationally. Their journey started with the goal of closing the infrastructure gap inside Indian railways by putting projects in place that would immediately increase the capacity of the rail system and get additional funding for SPV (Special Purpose Vehicle) projects. They have continuously received an excellent grade from the public enterprises department for years in a row since they started operating in 2005.
Impact of Budget 2025 on Railway Stocks
The BSE saw a 6.6% increase in shares of companies associated with railways as investors expected the industry to see a large boost in capital expenditures in the next budget. Let us break down what all railway stocks witnessed for better clarity.
With a 5.26% rise, Rail Vikas Nigam Ltd. (RVNL) came in front, hitting Rs 501.55.
The leader, Titagarh Rail Systems, increased 6.58% to Rs 1,087.
India’s Railtel Corporation increased by 4.71%.
IRFC increased 3.01% to Rs 155.5.
RITES increased by 3.52%.
Texmaco Rail shot up 3.61% to Rs 203.7.
IRCON International’s shares increased by 3.56% to reach Rs 229.45.
IRCTC witnessed a relatively moderate 1.99% hike, reaching Rs 838.35.
- BEML’s shares increased by 3.56%.
In the meantime, market sources suggest that the Ministry of Railways will overtake the customary foremost recipient, the Ministry of Highways, to earn the greatest percentage of capital investment in the next budget. The railways’ increased use of the FY25 budget and a large backlog of infrastructure projects, such as modernizing stations and building new corridors, are the main drivers of this change.
Final Verdict
Although the capex as per the Budget 2025 remains unchanged and there are no major reforms for railways in the budget, but the funds allocated for the development of railways might suffice for the overall growth and the railway stocks might witness major returns in the long run.
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Disclaimer: Demat Dive is not giving any buying advice on any stock. Consult a SEBI-registered advisor before investing anywhere.