Top stocks to buy as the govt gives Rs 2.55 lakh crore capex push for Railways

These stocks could be the key beneficiaries of the government’s Rs 2.55 lakh crore capex push for the Indian Railways. (Image: Reuters}

Railway stocks, including Rail Vikas Nigam Ltd, Ircon International Ltd, Indian Railway Finance Corporation Ltd, Titagarh Rail Systems Ltd, and Texmaco Rail & Engineering Ltd, are expected to experience significant gains following the recent Budget 2024 announcements made by Union Finance Minister Nirmala Sitharaman.

During her interim budget presentation on February 1, Sitharaman unveiled plans to convert approximately 40,000 rail bogies to Vande Bharat standards, signaling potential benefits for the mentioned railway companies. A substantial capital expenditure (capex) of Rs 2.55 lakh crore has been allocated for the Indian Railways in the new financial year.

The Finance Minister highlighted the conversion of 40,000 normal rail bogies to Vande Bharat standards as a measure to enhance passenger comfort, convenience, and safety.

Additionally, stocks such as Jindal Stainless and Gabriel India, along with major logistics firms like Container Corporation Of India and Transport Corporation Of India, are anticipated to reap rewards from the Budget 2024 initiatives.

The government’s proposal for three rail connectivity corridors – Energy, Mineral and Cement corridor, Port Connectivity Corridor, and a High Traffic Density Corridor – under the PM Gati Shakti plan is expected to enhance passenger train operations nationwide.

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The introduction of commodity-specific economic rail corridors is seen as a strategy to alleviate congestion on existing lines, primarily in the eastern part of the country. This move aims to facilitate faster freight movement, reduce turnaround times, and lower logistics costs for India, ultimately enhancing competitiveness, particularly in the manufacturing sector, compared to global peers.

The government’s commitment to expanding metro connectivity and the Namo Bharat schemes to more cities during the next fiscal year further underscores its focus on comprehensive infrastructure development in the transportation sector.

Here is how the stocks have performed in the past one year 

Jindal Stainless

Jindal Stainless shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 2.27% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 58.98%, indicating a strong upward trend.

Year-to-date, Jindal Stainless shares have surged by 8.62%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 136.68% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.

Gabriel India

Gabriel India shares have demonstrated positive returns across multiple time frames. Over the past five days, the stock has given a commendable 6.10% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 78.58%, indicating a strong upward trend.

Year-to-date, Gabriel India shares have dropped by 3.87%. Looking at the broader picture, the stock has delivered an impressive return of over 137.84% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.

Container Corporation Of India

The shares of Container Corporation Of India have demonstrated positive returns across various time intervals. In the last month, the stock delivered a positive return of 7.88%. Over the past six months, it exhibited strong momentum with returns of 34.40%, indicating a robust performance.

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Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 9.09%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 52.46% in the last year.

Transport Corporation Of India

The shares of Transport Corporation Of India have demonstrated positive returns across various time intervals. In the last month, the stock delivered a positive return of 18.22%. Over the past six months, it exhibited strong momentum with returns of 29.48%, indicating a robust performance.

Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 18.89%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 60.54% in the last year.

What Analysts Expect Ahead?

“The increase in railway projects will heighten demand for stainless steel for interiors, trims, and other applications. Jindal Stainless is well-positioned to capitalize on this uptick.  For Gabriel India, increased railway activity might translate to a higher demand for shock absorbers. However, the impact might be limited in the near term due to existing contracts and procurement cycles,” said Atul Parakh, CEO of Bigul

Parakh also said that, The government’s focus on improving logistics efficiency aligns with Container Corporation’s strength in container freight movement. TCI’s expertise in coal transportation could benefit from increased freight movement. However, the impact might be balanced by factors like competition and regulatory changes. The long-term outlook for the overall sector appears to be bullish.

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Whereas commenting on the same Pravesh Gour, Senior Technical Analyst at Swastika Investmart said, TCI operates in the logistics and supply chain management sector. With more rail projects underway, TCI’s expertise in cargo movement and infrastructure solutions could be in high demand, potentially benefiting its business prospects.

Adding to this Gour says, Gabriel India is a major player in the shock absorbers and suspension systems market. Upgrading existing bogies and manufacturing new ones would likely require a significant number of shock absorbers, potentially boosting Gabriel India’s business.