IRFC, IRCTC, RVNL, RITES BEML, IRCON: Top 10 Railway Stocks To Watch As Sector Transforms For Viksit Bharat

Railways in India are transforming. Thousands of crores of funds are being allotted for revamping rail infrastructure, connecting regions and enhancing Indian Railway facilities. This has led to a massive rally in railway stocks since last year, giving birth to a host of multi-baggers. Although railway stocks in March 2024 have seen few hiccups, its long-term prospects are robust as these projects will start to execute and commence operations. This week, PMO said, transformation of railway is the guarantee of Viksit Bharat.

Here are the key railway stocks that are in focus amid the 2024 election and on long-term basis:

1. IRCTC Share Price:

Indian Railways catering services provider IRCTC has surged by 51.5% in a year. On March 15, the stock was at Rs 913.60 apiece with a market cap of Rs 73,088 crore. In 2023, IRCTC has paid up to 400% dividend valuing to Rs 8 per share. Currently, it has a dividend yield of 0.6%.

This Mini Ratna was incorporated in September 1999, as an extended arm of the Indian Railways to upgrade, professionalize and manage the catering and hospitality services at stations, on trains and other locations.

2. IRFC Share Price:

The largest railway stock is IRFC with a market value of Rs 1,78,777.16 crore. The stock is currently at Rs 136.80 apiece but is a multi-bagger with gains of a whopping 404.07% in a year on BSE. The stock paid up to 15% dividend valuing to Rs 1.5 per share in 2023. Currently, it has a dividend yield of 1.1%.

IRFC is the dedicated funding arm of Indian Railways. The company was set up in December 1986 to mobilize funds from domestic and overseas markets to meet the predominant portion of the Extra Budgetary Resources requirement of Indian Railways.

3. RVNL Share Price:

RVNL is yet another railway stock with tremendous growth since last year on exchanges. In a year, the stock has zoomed by 298.23% on BSE to date. The stock is currently at Rs 245.80 apiece with a market cap of Rs 51,249.79 crore.

This week has been packed with huge orders under RVNL's belt.

RVNL works as the construction arm of the Ministry of Railways for project implementation and transportation infrastructure development.

In 2023, RVNL paid dividends up to 21.30% valuing to Rs 2.13 per share. Currently, it has a dividend yield of 0.87%.

4. Concor Share Price:

Container Corporation of India (Concor) has risen by 46.30% in a year. The stock is currently at Rs 867 apiece with a market cap of Rs 52,825.82 crore. In 2023, Concor paid a series of dividends to the tune of 300% valuing Rs 13 per share. It is also among the dividend king stocks in the railway sector with a yield of a massive 1.27%.

The Navratna company, Concor's core business is characterised by three distinct activities, that of a carrier, a terminal operator, and a warehouse operator.

5. IRCON International Share Price:

Another banger stock in the railway segment, IRCON International has rallied by a massive 299.06% in a year. Currently, the stock is at Rs 216.45 apiece, with a market cap of Rs 20,357.46 crore. Last month, IRCON turned ex-dividend for a 90% dividend payout worth Rs 1.80 per share. In 2023, the company paid up to 150% dividend amounting to Rs 3 per share. It has a dividend yield of 1.4%, one of the highest among others.

Government-backed, IRCON focuses on the construction of roads, bridges, railways, airports, airport runways, and residential, industrial, and commercial buildings.

6. Rites Share Price:

This transport infra stock has jumped by over 81% in a year. Currently, the stock is at Rs 622.60 apiece with a market cap of Rs 14,961.20 crore. YTD, the company delivered a 47.5% dividend amounting to Rs 4.75 per share for which it turned ex-dividend in January 2024. In 2023, the company paid dividends up to 202.5% valuing to Rs 20.25 per share. It has a yield of 3.29%, the highest so far in the sector.

RITES Limited, a Navratna Public Sector Enterprise, is a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach.

7. RailTel Corporation Of India Share Price:

Telecom services provider of railways, Railtel has surged by nearly 240% in a year. The stock is currently at Rs 350.70 apiece with a market cap of Rs 11,255.31 crore. In 2023, Railtel paid dividends of about 35.5% amounting to Rs 3.5 per share. Currently, it has a dividend yield of 0.73%.

RailTel, a "Mini Ratna (Category-I)" Central Public Sector Enterprise is an ICT provider and one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fibre network.

8. Texmaco Rail Share Price:

Texmaco is a smallcap and affordable. The stock is currently at Rs 165.55 apiece with a market cap of Rs 6,346.17 crore. In a year, the stock has jumped by 282% on BSE. In 2023, Texmaco paid up to 15% dividend valuing to Rs 0.15 per share. It has a dividend yield of 0.09%.

The Company is involved in the business of manufacturing Rolling Stock, such as Wagons, Coaches, EMUs, Loco shells & parts, etc., Hydro Mechanical Equipments, Steel Castings, Rail EPC, Bridges and other steel structures.

9. Titagarh Rail Systems Share Price:

One of the leading wagons stock, Titagarh Rail has advanced by 246.59% in a year on BSE. The stock is at Rs 847.75 apiece with a market value of Rs 11,416.97 crore as of March 15. In 2023, the stock paid dividends about 15% amounting to Rs 1.5 per share. It has a dividend yield of 1.1%.

Titagarh Rail Systems formerly known as Titagarh Wagons. The company is engaged in producing railway castings such as bogies and couplers for the Indian railways. They also participated in India's Semi high-speed train project, "Vande Bharat," aligning with policies like 'Make In India' and 'Atmanirbhar Bharat.'

10. BEML Share Price:

BEML is among the latest railway stock to pay dividends of 50% amounting to Rs 5 per share in 2024 so far. In 2023, the company paid dividends about 100% amounting to Rs 10 per share. It has a dividend yield of 0.36%. In a year, the stock gained by a massive 124.49%.

Currently, the stock is at Rs 2790 apiece with a market cap of Rs 11,618.82 crore.

BEML is engaged in manufacturing a variety of heavy equipment, such as that used for earth moving, railways coaches and spare parts, transport and mining.

Railway Boost:

In the 75 days of 2024, the government announced projects worth Rs 11 lakh crore, while a massive Rs 7 lakh crore projects were declared in the last 10-12 days, with railways getting massive allocations.

Earlier, this week, PM Modi laid the foundation for projects worth Rs 1 lakh crore, of which, Rs 85,000 crore were dedicated to railways. Railways are among the priorities of the government. Last month, the government also launched 2,000 railway infrastructure projects worth Rs 41,000 crore.

In the interim budget 2024 as well, railway stocks are seen as positive after Finance Minister Nirmala Sitharaman announced that the Union Ministry of Railways has been allocated Rs 2.55 lakh crore for FY25 for the development and transformation of rail infrastructure. This budget allocation is higher by 5.8% from the allocation of Rs 2.41 lakh crore for FY24.

After the budget allocation for FY24, AUM Capital believes the key announcements for railways are positive for companies like RVNL, IRCON, IRFC, Titagarh Rail, Texmaco Rail, and Concor among others.

Meanwhile, brokerage FISDOM highlighted that about the corridor programs announced in the budget. It believes economic railway corridor programs will enhance logistics efficiency and lower costs. Passenger train operations will improve, leading to enhanced safety and higher travel speeds for passengers. Further, alongside dedicated freight corridors, these three economic corridor programs will drive GDP growth and decrease logistic expenses. Key positive for Texmaco Rail, Titagarh Rail and BEML.

Disclaimer: The write-up is just for information basis, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.