Railway stocks bounce back; IRFC, Railtel, RVNL, others surge up to 11%

Railway stocks, bounced back with sharp gains on March 14 after correcting up to 15 percent earlier in the week. RITES, IRFC RVNL, IRCON International Ltd were among the stocks clocking up to 11 percent intraday gains.

Many of these stocks have a little free float, as the government hold up to 86 percent stake in some of the companies. Because of the low float, a surge in demand can trigger rapid price moves.

RITES jumped over 10 percent to hit an intraday high of Rs 649.70 on NSE. The stock of the so-called Navaratna has surged 87 percent in the past year against a 30 percent gain for the Nifty during the period.

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IRFC, which has given returns of 408 percent in the past year, was up 10 percent.

Shares of Railtel, Ircon International and RVNL jumped up to 10 percent. Texmaco Rail, Titagarh Rail and Jupiter Wagons stocks, which fell up over 8 percent in the previous session, too, were trading up to 10 percent higher.

IRCTC was up 2 percent.

According to Khushi Mistry, research analyst at Bigul, the digital arm of Bonanza Portfolio, the outlook is positive as the railway sector is likely to witness several catalysts on account of upcoming projects, increased government spending, and healthy order books of these companies.

“Investors can use corrections to either accumulate or even make fresh entries,” she told Moneycontrol.

Also Read | Rail stocks under pressure, Titagarh, RailTel, Jupiter Wagons fall up to 8%. Here’s why

“As far as railways are concerned, the story is pretty much the same. If somebody picks up rail-related companies, there is absolutely no way they can go wrong with the kind of work which is happening in Indian Railways currently,” Sudip Bandopadhyay of Inditrade Capital said an interview to CNBC-TV18.

“So whether it’s a wagon manufacturing companies or the financing companies in the railway side, I think after some correction, there will be decent bets for the long term,” he said.

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