Railway stocks extended rally for the second consecutive day amid a rebound in the broader market and recent deal wins by specific companies
After a strong rally over the past few days in Defence sector stocks, railway stocks are now gaining steam. Railway stocks have remained under pressure for the past couple of months. Some stocks even saw corrections roughly in the range 50 per cent to 70 per cent from their respective record highs.
Shares of Rail Vikas Nigam Limited (RVNL), Indian Railway Finance Corporation (IRFC), Ircon International, Titagarh Rail Systems, Container Corporation of India (CONCOR), BEML, RITES, and RailTel Corporation of India (RailTel) gained up to 5.4 per cent in today's trade. These stocks had rallied in the previous session (May 16) as well.
Experts said the rally in railway stocks has come amid a rebound in the broader market and recent deal wins by specific companies.
Ajit Mishra, SVP of Research at Religare Broking, told Outlook Money that after spending nearly a year in a corrective phase, the market is now witnessing broad-based buying interest, including in railway stocks. He said that many of the railway stocks had declined by 50 per cent to 70 per cent from their record highs and are now bouncing back in line with the overall market recovery.
Mishra also highlighted that recent order wins by some companies have further boosted sentiment.
RVNL shares surged 5.42 per cent to Rs to end at Rs 431.80 per share on the NSE. The rally came after the company announced on May 16 post-market hours that it has incorporated a wholly-owned subsidiary Sabbavaram Sheelanagar Road Development Ltd in Andhra Pradesh.
Earlier on May 15, the company announced that it won a work order worth Rs 115.8 crore from Central Railway. The order is for OHE modification work to upgrade the 1x25 KV traction system to 2x25 KV in the Itarsi–Amla section, Nagpur Division, to support a 3000 MT loading target, the company said in its regulatory filing.
Shares of wagon-maker Jupiter Wagons climbed as much as 8.3 per cent in early trade to an intraday high of Rs 457 apiece on the NSE. However, later in the day, the company announced its fourth quarterly results for the fiscal year 2024-25 (Q4 FY25).
Jupiter Wagons reported a consolidated net profit of Rs 103 crore for the quarter, slightly lower than Rs 105 crore reported in the same period last year, a drop of 1.9 per cent year-on-year (YoY). The company's consolidated total income also declined by 6.2 per cent, coming in at Rs 1,057 crore compared to Rs 1,127 crore in the year-ago quarter.
Ajit Mishra of Religare Broking suggested that investors should be selective when it comes to railway stocks and pay close attention to how well companies are delivering on their projects.
Manasvi Garg, a Securities and Exchange Board of India-registered investment advisor (Sebi RIA), CFA, and founder and CEO of Moneyvesta, said, "Despite the recent rally, the short- to medium-term outlook remains cautious, especially given that the railway sector's allocation has not increased in the FY26 Union Budget."