Shares of public sector undertakings (PSUs) in the railway sector, including Rail Vikas Nigam Ltd (RVNL), RailTel Corporation, IRCON International Ltd, RITES Ltd, and Indian Railway Finance Corporation (IRFC), saw notable gains on Monday, November 25, 2024. These stocks surged by as much as 10%, reflecting growing investor confidence.
RVNL led the rally with a sharp 10% rise in its share price. This surge follows a significant ₹838 crore order from Eastern Railways, adding to RVNL’s strong pipeline of orders. Similarly, RailTel Corporation’s stock also saw a 10% jump after securing a ₹9.93 crore manpower outsourcing contract from the Central Medical Services Society, a body under the Department of Health and Family Welfare.
IRCON, another key player in the sector, experienced a 7.5% increase in its share price after receiving an upgrade in its credit ratings from Infomerics Valuation and Rating. The company was assigned a solid IVR AAA/Stable rating, signaling financial strength and stability.
The momentum in the railway stocks also coincides with the recent victory of the Bharatiya Janata Party (BJP) in the Maharashtra state elections, which has spurred investor optimism. According to Mahesh M Ojha, AVP of Research at Hensex Securities, after the Lok Sabha elections, investors had initially adopted a defensive approach, favoring FMCG and pharma stocks. However, with the Maharashtra election results, there is a noticeable shift toward sectors like infrastructure, banking, and railways, with investors becoming more aggressive in their strategies.
Analysts, including Seema Srivastava of SMC Global Securities, are advising caution despite the strong gains. While railway-focused stocks present long-term potential due to government infrastructure projects, Srivastava recommends a buy-on-dips strategy, given the volatility in the markets.
