Not RVNL Or IRCON, Nuvama Picks Titagarh, Texmaco As Winners Of Budget 2024

Titagarh Rail Systems, BEML and Texmaco Rail and Engineering will benefit from the announcements for the railway sector in the budget says Nuvama Institutional Equities.

What Happened: Nuvama Institutional Equities in its note said the government’s focus on rolling stock in the latest budget will benefit players like Titagarh and Texmaco more. The central government has allocated ₹2.65 lakh crore for railways, a 2.7% increase from the revised spending for FY24.

“As far as FY25 is concerned, railways are focussing on giving a holistic experience to the travellers, evident in the significant increase in capex towards passenger amenities. On the other hand, the outlay for electrification, doubling and Metropolitan Transport Projects is likely to decline YoY”, Nuvama said.

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The analysts said that the budget focused on rolling stock procurement rather than network expansion. Budget outlay for railways shows rolling stock had the highest increase from the previous year as it has a 10% increase from the previous year in budget support. Budgetary allocation to rolling stock increased from ₹47,500 crore in FY24 budgeted estimates to ₹52,300 crore in FY25 budgeted estimates.

The railway has increased the rolling stock procurement target as well. The railways will now look to procure 38,000 wagons as compared to the 26,000 wagons planned in the interim budget. Similarly, targets have been increased for locomotives from 1200 to 1600 and coaches 8405 from 7748.

These steps will be beneficial for Titagarh, BEML and Texmaco, the brokerage said.

On Budget Day, popular railway stocks like RVNL, and IRFC were in the red as the railway capex was kept unchanged from the interim budget. The street was pencilling in a hike in the allocation.

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