Last updated: Sep 11, 2023 2:00 PM IST
Railway stocks Ircon, RVNL and Railtel are in a record rally.
Shares of railroad-related stocks were on an upward trajectory, with shares rising 2-15%; Know why
Shares of railroad-related stocks were on an upward trajectory. Shares rose 2-15 percent on September 11 on a brighter outlook after the G20 summit in New Delhi unveiled a multinational rail and port deal linking the Middle East and South Asia. The plan is to counter China’s Belt and Road infrastructure push with an American backup.
Among the shares, Ircon International touched a new high of Rs 153.65, up 15 percent on the BSE in intraday trade on Monday. The counter saw huge trading volumes, with almost 26 million shares cumulatively changing hands in the first eleven minutes of trading on the NSE and BSE.
Ircon is a leading turnkey construction company in the public sector (under the Ministry of Railways). The company has carried out projects in the field of railway construction, including ballastless track, electrification, tunneling, signaling and telecommunications, as well as locomotive leasing, construction of roads, highways, commercial, industrial and residential buildings and complexes, runways and airport hangars. , subway and mass rapid transit system, etc.
Meanwhile, shares of Indian Railway Finance Corporation (IRFC) also hit a new high of Rs 84.50, up 10 percent in intraday trade. In the past seven trading days, the price has risen by 68 percent. A sharp rally in the company’s share price has taken IRFC’s market capitalization above Rs 1 trillion. Currently, the market capitalization of IRFC stands at Rs 1.11 trillion, BSE data shows.
Shares of Rail Vikas Nigam also rose 10 percent to Rs 178.90, while RITES rose 6 percent to Rs 583.45 on the BSE in intraday trade. In comparison, the S&P BSE Sensex rose 0.35 percent to 66,834 at 9:35 am.
A new shipping and rail route connecting countries in the Middle East, South Asia and Europe was unveiled at the G20 summit. The US, India, Saudi Arabia, UAE, EU and other G20 partners plan to explore a transport corridor for trade, energy and data from India via the Middle East to Europe.
However, these are just announcements and no company has been directly awarded a specific contract for this corridor.
Railroad stocks have been on a strong uptrend in recent days, supported by fundamentals.
“Right now there is tremendous momentum as far as defense and rail companies are concerned. But in terms of investors and valuations, we may be ahead of the curve,” Krishna Kumar Karwa of Emkay Global told CNBC-TV18.
“Maybe there could be some consolidation, some price correction and that’s why investors should be careful about investing in this market segment. I’m not saying there aren’t opportunities. “I agree that valuations may not even be discounted even in FY25-FY26, and my rule of thumb is that if you believe the best is discounted three years ahead, you need to take some money off the table,” he added .
