Stocks that could gain from the Indian Railways' ₹1,00,000 crore plan to eliminate waiting lists

Eivod Desk
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Indian stocks
Stocks that might benefit from Indian Railways ₹1,00,000 crore plan

The Indian Railways' ambitious ₹1 lakh crore plan to eliminate waiting lists by acquiring new trains has the potential to benefit several sectors and the stocks associated with them. Here's a breakdown of some potential beneficiaries:

Railway Infrastructure

  • IRCON: This PSU giant is a major player in railway infrastructure development, including construction of tracks, bridges, and stations. Increased spending on infrastructure will likely boost IRCON's order book and revenue.
  • Titagarh Wagons: A leading manufacturer of railway wagons and bogies, Titagarh Wagons stands to gain from the need for new rolling stock under the plan.
  • Texmaco Rail & Engineering: Another major player in railway infrastructure and rolling stock manufacturing, Texmaco could also see a positive impact from the increased investment.

Railway Rolling Stock

  • Bharat Forge: A leading manufacturer of forged components for locomotives and wagons, Bharat Forge's business is directly tied to the rolling stock market. The new train procurement plan is likely to drive demand for its products.
  • KEC International: This infrastructure EPC company is also involved in the manufacturing of railway coaches and locomotives. Increased orders could boost its revenue and order book.
  • GR Infraprojects: A diversified infrastructure player with a presence in the railway sector, GR Infraprojects could benefit from contracts related to track laying, electrification, and other associated works.

Signalling & Communication

  • Sterlite Technologies: A leading provider of optical fiber and cable solutions, Sterlite Technologies could see increased demand for its products as the Railways upgrade their signaling and communication systems.
  • Elnet Technologies: This company specializes in railway signaling and communication systems, making it a direct beneficiary of the planned modernization.
  • Genus Power Infrastructure: Another player in the railway signaling and communication space, Genus Power Infrastructure could also see its business grow with the increased investment.

Railway Ancillary

  • Dixon Technologies: A manufacturer of electronic components and assemblies for various industries, Dixon Technologies supplies to the railway sector as well. Increased demand for trains could lead to more orders for its products.
  • Gabriel India: This manufacturer of shock absorbers and suspension systems for railways stands to benefit from the need for new rolling stock with advanced suspension systems.
  • Minda Industries: A leading manufacturer of automotive components, Minda Industries also has a railway division that supplies brakes, horns, and other safety equipment. The new train plan could boost demand for its railway-specific products.

Indian Railway Finance Corporation Ltd (IRFC)

  • Increased funding needs: IRFC acts as the dedicated financing arm of Indian Railways, raising funds from domestic and international markets. This ambitious plan will significantly increase the Railways' capital expenditure, leading to more borrowing requirements. As the primary funding source, IRFC is expected to play a crucial role in financing these projects, with increased loan disbursements and potentially higher profits.
  • Strong financial performance: The increased infrastructure activity will lead to better project returns, improving IRFC's overall financial performance and creditworthiness. This could attract more investors and lead to lower borrowing costs for the corporation.
  • Growth in assets and net interest income: With larger loan disbursements, IRFC's asset base and net interest income are expected to rise. This, in turn, can contribute to dividend growth for shareholders.

Rail Vikas Nigam Ltd (RVNL)

  • Project execution opportunities: RVNL acts as a project executing agency for Indian Railways, undertaking construction of new lines, electrification, doubling of tracks, and other infrastructure development. The ₹1 lakh crore plan presents a vast pipeline of projects, providing RVNL with significant revenue and order book growth opportunities.
  • Proven track record and expertise: RVNL has a successful track record of delivering railway projects on time and within budget. This expertise makes it a preferred choice for executing projects under the new plan, giving it a competitive edge.
  • Diversification and expansion: The new plan covers various project types, allowing RVNL to diversify its portfolio and expand its market presence. This can mitigate risks associated with relying on a limited set of projects.

It's important to remember that these are just some of the potential beneficiaries, and the actual impact on individual stocks will depend on various factors like order book size, contract awards, and overall market conditions. However, the Indian Railways' ambitious plan undoubtedly presents a significant opportunity for companies involved in various aspects of the railway sector.

DISCLAIMER: This article by Eivod is general in nature. We provide investment opinions, based on historical data and our articles are not intended to be investment advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis, driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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