THE RAIL RESURGENCE

Having surged substantially over the past year, stocks of companies in the railways space still have ample steam left to keep growing over the next few years

- RAHUL OBEROI

RAILWAYS-FOCUSSED FIRMS, once considered outdated remnants of a past era, have staged a resurgence in the past year by delivering returns on the bourses that would make even the most jaded investor whistle with joy. Market watchers say the government’s focus on improving and growing rail infrastructure in India in the past few years has fuelled this performance.

Sample this: The Ministry of Railways received ₹2.4 lakh crore in budgetary allocation in 202324, which is 24.10 per cent of the government’s budgeted capital expenditure for the year. It used to be less than 18 per cent till 2018-19. The government’s overall capex has also increased by more than 3x to around ₹10 lakh crore in FY24, from ₹3.1 lakh crore in FY19. As a result, railways-focussed companies have had a stellar performance on the bourses in the past one year due to the huge inflow of orders.

ON THE FAST TRACK

For instance, with a growth of nearly 410 per cent, the average market capitalisation (m-cap) of Jupiter Wagons has soared to ₹5,686 crore in the period, from ₹1,116 crore earlier, resulting in its entry into the BT500 2023 list at No. 495. Ircon International has also managed to enter the list at No. 437 on the back of an order book worth ₹32,486 crore in Q1FY24, up from ₹13,293 in FY15. Ircon and Jupiter were not on the BT500 list in 2022.