Railway stocks gain traction ahead of Union Budget: Potential for 12-15% budgetary boost

Railway stocks are poised for a potential surge as the Union Budget 2024 approaches on July 23. Key players including Rail Vikas Nigam (RVNL), Indian Railway Finance Corporation (IRFC), Ircon International, NBCC (India), RailTel Corporation of India, and Texmaco Rail & Engineering have already seen significant gains post the interim budget.

The railway sector is anticipated to receive a substantial budgetary boost of 12-15% in the upcoming Union Budget. This optimism is fueled by the interim budget’s allocation of Rs 2,52,200 crore and additional plans for dedicated freight corridors, improved port connectivity, and congestion management.

Experts and industry stakeholders emphasize the need for continued capital expenditure to drive the railway sector’s growth. Key focus areas include:

• Safety: Accelerated deployment of the Kavach anti-collision system.
• Modernization: Introduction of more Vande Bharat and Amrit Bharat trains, along with advancements in technology like IoT, AI, and robotics.
• Infrastructure: Expansion of rail networks, including high-speed trains and economic corridors.
• Public-private partnerships: Promoting hybrid annuity models and asset monetization.

While the railway sector presents immense growth potential, challenges such as the absence of a regulatory body and limited public-private participation persist. However, the conversion of rail bogies to Vande Bharat standards and the increasing demand for rail travel offer promising opportunities. Overall, the railway sector is on track for significant expansion and modernization, making it an attractive investment prospect for many.