MUMBAI – Shares of railway stocks came off their day’s highs amid profit booking post the interim budget presentation by Finance Minister Nirmala Sitharaman.

For 2024-25 (April-March), the government has increased the total capital outlay by 11% to Rs 11.11 lakh crore, which was largely on expected lines.

The government plans to convert around 40,000 rail bogies to Vande Bharat standards. It has also proposed three rail connectivity corridors under the PM Gati Shakti plan. This is expected to improve passenger train operations across the country.

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Metro connectivity and Namo Bharat schemes have been proposed to expand to more cities during the next fiscal year.Read more: Track live Budget day market updatesShares of Indian Railway Catering and Tourism Corporation, Indian Railway Finance Corporation, Ircon International, Rail Vikas Nigam, Railtel Corporation, Titagarh Railsystems, Rites, and Ramkrishna Forgings were flat to down around 1%. Outliers were BEML and Jupiter Wagons traded in the positive territory. In the budget for 2023-24, the highest capital outlay was announced for Indian Railways at Rs 2.4 lakh crore. Of this, spending of close to Rs 1.98 lakh crore has already been done so far in the current fiscal year.

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Thanks to the increased outlay, stocks of atleast 10 companies, which cater to the railways sectors, have given multibagger returns of upto 380% in the last one year.

In FY24, government spending in railway infrastructure had surged to Rs 2.4 lakh crore which would directly contribute to a robust order book for companies engaged in manufacturing railway equipment, analysts said.

Railway capex is expected to further elevate to 20% growth YoY, led by further expansion of DFC, rolling stock, HSR networks, etc as outlined in the National Rail Plan, say industry experts.

“The infrastructural boost towards improvement of the National Rail Network needs to continue and the 3000 MT mission must not get diluted by any means,” Vivek Lohia, Managing Director, Jupiter Wagons said.

“After the success of Vande Bharat trains, the FM announced around 40,000 more rail bogies will be converted to Vande Bharat coaches. Stocks such as Jupiter Wagons, Titagarh Rail Systems, Siemens, RVNL would benefit from the manufacturing of Vande Bharat trains. This will further create job opportunities while reducing travel time as well as increasing tourism across the country,” Sanjay Moorjani, Research Analyst at SAMCO Securities said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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