Up to 1,800% returns! How RVNL, Titagarh, other railway stocks performed in Ashwini Vaishnaw’s last stint

Now that Ashwini Vaishnaw will continue as the Railway Minister in the Modi 3.0 government, the focus is expected to once again shift to stocks in this sector, many of which have delivered multibagger returns over the last one year.

ETMarkets analysed the performance of railway sector stocks in his previous stint along with the performances of counters in three other ministers during the Narendra Modi 1.0 and 2.0 government.

In the previous two governments, there have been four railway ministers viz. D.V. Sadananda Gowda, Suresh Prabhu, Piyush Goyal and Ashwini Vaishnaw.

The shortest tenure was of Gowda which spanned between May 26, 2014 and November 9, 2014 and he was the first minister to take charge of this lucrative ministry. He was followed by Suresh Prabhu whose tenure lasted between November 9, 2014 and September 3, 2017. Next to occupy the office was Piyush Goyal between September 4, 2017 and July 7, 2021. Meanwhile, Vaishnaw has been there at the helm since July 7, 2021 to the present day.

State-run company stocks like IRCTC, IRFC, Ircon, RVNL, Railtel and RITES were listed in Vaishnaw’s tenure.
Analyst Vinit Bolinjkar of Ventura Securities feels that power and railways will be two sectors that could remain in prime focus on the back of huge demand and recommended investors to remain long on them.

Amisha Vora, Chairperson & MD, Prabhudas Lilladher also sees long term India growth story to remain intact in the railway sector. In chat with ETNow, she said that the correction which is happening in railways, power or capital goods was very good and it would bring some soberness in the valuations.

Nilesh Jain, Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking said that the overall railway space is currently witnessing some consolidation and he expects this sideways move to continue in the short term. For him, the stocks like IRCTC, RVNL and Railtel look good and could be added on declines. If someone is already holding them, they should continue holding them, he further said.

Fundamentals

Most railway stocks have gained on the renewed government focus on the sector resulting in growing orderbook and improved earnings.

The best performer is a privately owned Titagarh Rail with over 1,800% returns since he took over. The stock has consistently delivered quarter-on-quarter growth in its net profit. In Q4FY24, the standalone profit after tax (PAT) stood at 79 crore up 64% on the year-on-year basis. Another star performer Jupiter Wagons has reported a 153% YoY uptick in PAT in the January-March quarter at Rs 104 crore.

In the PSU pack, RVNL delivered 1066% gain. The gains have been backed by solid performance by the company. Its net profit jumped from Rs 345 crore in Q4FY23 to Rs 433 in Q4FY24, recording a surge of 26% on a YoY basis. IRFC’s multibagger rally of 627% is also supported by strong YoY and QoQ earnings growth. Its PAT jumped 33% to Rs 1,717 crore in Q4FY24 from Rs 1,285 crore in Q4FY23.

(Data Inputs from Ritesh Presswala)

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