RVNL, IRFC, IRCTC Surge Up To 16% Ahead Of The Union Budget 2024; Know Why

Shares of Rail Vikas Nigam (RVNL) and Indian Railway Finance Corporation (IRFC) rallied 15.5 per cent and 9 per cent to their new all-time highs of Rs 567 and Rs 206 respectively on BSE in Monday’s trade ahead of the Union Budget, where the focus is likely to be on infrastructure investment.

Meanwhile, the shares of other railway companies also soared high to touch their new peaks today. Shares of Texmaco Rail & Engineering rose 8.3 per cent to its new 52-week high of Rs 295.65, while those of RailTel surged 7.5 per cent to its new peak at Rs 559.35.

Ircon International and Oriental Rail Infrastructure shares also jumped up to 6.64 per cent to their new highs while RITES shares went up by 4.5 per cent on BSE to the day’s high of Rs 797.

Vaishnav’s announcement of the production of 50 new Amrit Bharat Trains – a high-speed and luxury train service – added to the rally in railway stocks.

Expectations of special focus on the railway infrastructure in the Union Budget have helped push the stocks higher. The government is focusing on improving the railway infrastructure and ensuring faster development and completion of tracks, rail electrification, rolling stock manufacturing and delivery of passenger freight services.

Narendra Modi government’s focus on infrastructure building, especially through domestic manufacturing in sectors such as railways, defence, and power has boosted stocks from these spaces in last few years.

Now, with BJP-led NDA retaining power for a third term, investors are hopeful of policy continuity. In an earlier note, Goldman Sachs had said that it expects continued thrust on infrastructure creation through the development of railways.

Finance Minister Nirmala Sitharaman will be presenting the Union Budget that will lay the roadmap of Modi 3.0 on July 23 in Lok Sabha. The Parliamentary session for the Budget will commence on July 22 and continue till August 22.

In the last year, railway stocks have benefited their investors by giving multibagger returns. IRFC has given returns of 505 per cent. RVNL and RailTel have gained over 300 per cent on charts while Ircon International, Texmaco Rail and Oriental Rail Infrastructure have increased by over 200 per cent. Meanwhile, RITES shares have increased by 104 per cent in the same time period.