IRFC, RVNL, IRCON In Green Ahead of Budget 2024 On Hopes Of Increased Capital Allocation To Railway

Railway stocks were trading in the green on Tuesday before the Budget announcement. 

What Happened:  Finance Minister Nirmala Sitharaman is set to announce the Union Budget for 2024 at 11 a.m. in the parliament on Tuesday. 

Railway stocks such as RVNL, IRFC, Titagarh and IRCON opened higher on Tuesday. The market sentiment is buoyed by expectations of increased capital expenditure on railway infrastructure, which could include upgrading of tracks, introduction of new trains, and enhancement of safety measures. Such investments not only promise to modernise the aging rail infrastructure but also provide a boost to ancillary industries.

See Also: Suzlon Sees Profit Surge 200% To ₹302 Cr, Orderbook At All-Time High

Nuvama Institutional Equities expects a 15%-20% increase in capex towards the railway sector. The focus will be on rolling stock, safety, new tracks laying compared to the tracks electrification in the past decade, the research firm said. Increase in capital allocation will be positive for companies doing the projects and the ones who are supplying the equipment, it added.

Railway has been one of the beneficiaries of the government’s focus on infrastructure. Railway stocks have surged between 70% and 500% in the last year. Since last year, shares of IRFC have zoomed more than 530%, RVNL soared 390%, Railtel surged 270%, IRCON and Jupiter Wagons rose more than 260%.

Price Action: Shares of railway stocks were in the green on Tuesday. 

Shares of RVNL were up 0.70% at ₹628.45.

Shares of IRFC were up 1.92% at ₹208.50

Shares of IRCON were up 1.50% at ₹323.75.

Shares of Titagarh were up 1.08% at ₹1,640.40.

Shares of Jupiter Wagons were up 0.93% at ₹647.95.

Shares of Railtel were up 2.29% at ₹535.70.

Shares of Rites were down 0.36% at ₹727.55.

Read Next: ONGC To Announce Q1 Results On August 5