IRCTC, RVNL, Ircon to IRFC: Why railway stocks are skyrocketing in stock market today? — explained
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Today, despite overall weakness in the Indian stock market, railway stocks are experiencing significant buying interest. Shares of Indian Railway majors such as Ircon International, Rail Vikas Nigam Limited (RVNL), and Indian Railway Finance Corporation (IRFC) saw substantial gains from the Opening Bell. Specifically:
- RVNL share price surged over 12% intraday, reaching a new peak.
- IRFC share price climbed to a new peak of ₹206, with an intraday rise of around 9%.
- Ircon share price hit a new record high of ₹334.50 apiece on NSE, logging over 7% rise.
- Indian Railway Catering and Tourism Corporation (IRCTC) share price increased by nearly 2%.
Reasons for the Surge
According to stock market experts, the rally in railway stocks is due to several factors despite a generally sideways trend on Dalal Street:
- Minister for Railways’ Announcements:
- Ashwini Vaishnav, the Minister for Railways, announced plans for 2,500 new general passenger coaches and 10,000 additional coaches.
- He also disclosed the production of 50 new Amrit Bharat Trains, a high-speed and luxury train service.
- Union Budget Expectations:
- Anticipation of a special focus on railway infrastructure in the upcoming Union Budget is acting as a catalyst for this upward movement.
Expert Insights
- Sandeep Pandey, Founder of Basav Capital:
- Attributes the rise in railway stocks directly to the Minister’s announcements regarding new passenger coaches and high-speed trains.
- Notes significant buying interest on Monday due to these announcements, driving the upward movement in railway stocks.
- Avinash Gorakshkar, Head of Research at Profitmart Securities:
- Highlights the November 2023 announcement by the railway minister of introducing 3,000 new trains over the next five years.
- Anticipates significant railway infrastructure-related announcements in the upcoming budget on 23rd July 2024.
- Emphasizes the Indian government’s consistent focus on infrastructure since 2014, with the market eagerly anticipating a growth-oriented Union Budget 2024, particularly in the energy, power, railways, and other infrastructure segments.
The focus on expanding capital expenditures (Capex) by Indian railway companies is also expected to keep their business volumes on an upward trend, making railway stocks an attractive bet for investors despite high valuations in the current market.
IRCTC, RVNL, Ircon to IRFC: Why railway stocks are skyrocketing in stock market today? — explained