Following a significant correction of up to 15 percent earlier in the week, railway stocks saw a robust rebound on March 14, with RITES, IRFC, RVNL, and IRCON International Ltd registering intraday gains of up to 11%.
A notable characteristic of many of these stocks is their limited free float, as the government holds up to 86 percent stake in some of these companies. This low float makes them susceptible to rapid price movements when demand surges.
RITES, for instance, surged over 10 percent to reach an intraday high of Rs 649.70 on the NSE. Often referred to as a ‘Navaratna’, the stock has witnessed an impressive 87 percent surge over the past year, compared to a 30 percent gain for the Nifty during the same period.
IRFC, the high-performing stock that has delivered remarkable returns of 408 percent over the course of the past year, demonstrated its strength once again by climbing 10 percent.
Railtel, Ircon International, and RVNL all experienced significant surges, with their shares climbing by up to 10 percent. Meanwhile, Texmaco Rail, Titagarh Rail, and Jupiter Wagons, which had witnessed declines of over 8 percent in the previous session, also rebounded strongly, registering gains of up to 10 percent.
Among the notable performers, IRCTC saw a modest uptick of 2 percent in its share price.
Khushi Mistry, a research analyst at Bigul, the digital arm of Bonanza Portfolio, provided insights into the positive outlook for the railway sector. Mistry highlighted various factors contributing to this optimism, including upcoming projects, increased government spending, and robust order books for companies in the sector. She advised investors to consider utilizing market corrections as opportune moments for either accumulating existing positions or initiating fresh investments.
Sudip Bandopadhyay, from Inditrade Capital, emphasized the consistent growth narrative within the railway sector. In an interview with CNBC-TV18, he expressed confidence in the prospects of rail-related companies, citing the ongoing developments within Indian Railways.
Bandopadhyay highlighted that investing in rail-related entities, be it wagon manufacturing firms or financing companies operating within the railway domain, presents promising opportunities. He suggested that despite occasional corrections, these companies remain solid long-term bets due to the continuous advancements and expansions within the Indian Railways sector.
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