The Hindu Business Line : Budget hopes drive up railway-linked stocks

Mumbai, June 29 Ahead of the railway budget, scheduled on July 3, companies that derive business from this sector are witnessing a rally in their stock prices. The stocks of some of these companies gained substantially on Monday.

In expectation of a railway budget allocation to higher spending in the sector, these companies gained significantly as they might benefit in terms of higher order books, said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets.

The stock price of BEML rose by more than 17 per cent on Monday. Other gainers were Kernex Microsystems (4.96 per cent), Texmaco (4.91), Titagarh Wagons (4.91), Stone India (4.91), Hind Rectifiers (4.84), Kalindee Rail Nirman Engineers (4.54), Simplex Casting (2.24) and Container Corporation of India (0.87 per cent). The Sensex gained 0.14 per cent during the day.

These companies are gearing up to grab opportunities thrown up by the Indian Railways’ Plan entailing an outlay of Rs 2,30,000 crore for the 11th Five-Year Plan, said a research report by Way2Wealth Securities. To meet the growing demand for wagons and new-generation suburban rail (EMU) coaches, the railways have farmed out orders to various coach manufacturers, prominent among them BEML, said the report.

“Indian Railways has decided to step up its share of procurements from private sector players for new-gen suburban rail (EMU) coaches. As part of the move, which comes under its public-private partnership initiative, the railway board is shortly expected to invite fresh tenders for supplying 21 rakes from a clutch of companies, among which is Titagarh Wagons.

“According to railway officials, in the immediate future the share of private players is only likely to go up, thus benefiting the company from the additional demand for wagons and rail coaches.”

Some of these stocks have been gaining substantially during the past week in expectation of the dedicated rail freight corridor, which is expected to be announced in the budget, said an analyst with a Mumbai-based brokerage house. This corridor will provide railway projects worth Rs 58,000 crore, added the analyst.

Kalindee Rail, which specialises in railway tracks, signalling and telecommunications, would be a beneficiary, according to brokers. It is expected to get orders worth Rs 500 crore in the next few years, according to Way2Wealth.

The report added: “It is widely expected that in the railway budget, Government will add more capital assets and revise the Liberalised Wagon Investment Scheme, which could generate more demand for wagons that will boost the prospects of wagon manufacturers like Texmaco.

“Texmaco has decided to raise up to Rs 200 crore of fresh resources from the market to finance future growth plans, including the setting up of a greenfield metro coach manufacturing facility.”

More Stories on : Stocks | Budget | Railways

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
DSP BlackRock files for long/short fund

Investors’ gain is distributors’ loss

Budget hopes drive up railway-linked stocks

Deficit monsoon may support sugar prices

Kolkata firms buy ECE shares

JM Fin net down 82% in March quarter

HDIL, Reliance shed open interest

Day Trading Guide

Automotive Axles (Rs 150.9): Buy

UCO Bank may raise Rs 500 cr via follow-on public offer