Top 7 Railway Stocks in India

Were you aware that the railway stocks (railway-related companies) bounced an excellent 18% upwards on 19 January 2024? In case railway stocks interest you, now is the best time to add them to your portfolio. After all, history has proved that railway companies’ stocks perform better right before the announcement of the finance budget.

Interestingly, the nation is buzzing with the possibility of pumping the railway sector with a larger fund (around ₹2.4 lakh crore) in the upcoming interim budget 2024-25. 💸

Think of all the possibilities these investments could mean for the advancement of the Indian Railways. And now, ponder on how you can benefit from it. Along with enjoying the comfortable rides to your destinations, why not monetise on the golden ticket? 🎫

In this article, I will provide some of the railing options among the hundreds of railway stocks listed. But don’t forget to do your due diligence in research.
Now that you have been warned, let us begin the list of the best railway stocks in India, shall we? 😃

7 Game-Changing Railway Stocks for 2024

Railways is one of the key industries at the forefront of the current government's focus. The following pointers create a beautiful picture of the advancement in India Railways:

• Massive infrastructure overhaul of railway tracks 🛤️
• Skyrocketing tourism with events like the Ayodhya Ram Temple inauguration 🛕
• The recent launch of multiple Vande Bharat trains and plans to increase bullet trains 🚅
• The introduction of the India-Middle East-Europe corridor for further establishment of rail, road, and sea routes 🌎

In short, the Indian railway scene is hotter than a tandoor on a Friday night.

Adding spice to the party night are the following 7 Indian railway stocks:

1. IRFC

Famous for being the funding arm of the railway industry, the Indian Railway Finance Corporation (IRFC) specialises in raising funds through bonds and debentures. This multi-bagger stock has been rated "AAA" by credit rating agencies, signifying the high financial strength of the railway department.
 
In 2023, IRFC portrayed a whopping 350% CAGR return with over 25% profit growth in the past 5 years. It is now floating at ₹15.95 as of 19 January 2024, which is a long way from being somewhere at ₹33 in February 2023. 

IRFC is also responsible for leasing rolling stock (locomotives, coaches, wagons) to the Indian Railways. With a market capitalisation of ₹1,94,786.08 crore, IRFC turned out to be a killer addition for 2023 and has been predicted to be a promising hike for 2024 as well.

2. RVNL

A Public Sector Undertaking (PSU) under the Ministry of Railways, Rail Vikas Nigam Ltd. executes and implements various railway infrastructure projects, including track doubling, electrification, and station redevelopment. Hence, it is also renowned as the construction arm of the railways.

RVNL has constructed several major rail tunnels and bridges across India and is actively involved in dedicated freight corridor projects. It has also performed wonderfully in the stock market, with a CAGR return of 215.5% in 2023.

With over 20% profit growth in the last 5 years, RVNL is trailing at ₹292.3 as of 19 January 2024. Last year, this time around, the stock price of RVNL was somewhere around ₹77.

A major advancement in just one year, right? Told you! 😌 But wait! This next one is even better.

Whenever you order food on a train, remember this company is the one satisfying your appetites. 😋

3. IRCTC

Indian Railway Catering and Tourism Corporation, or IRCTC, is majorly owned by the Government of India (87%) and has been listed since 2019. This PSU stock is responsible for catering services, onboard hospitality, packaged tours, and online ticketing for Indian Railways.

With a CAGR return of 44.8%, this stock’s performance in 2023 has been especially noteworthy. IRCTC is the largest rail caterer in Asia and is known for its growing profitability.

Stock price ranging at ₹974 as of 19 January 2024, IRCTC is boasting a market cap of ₹74,764 crore. IRCTC also entered into operating private trains with Tejas Express, India’s first private train, in 2020.

4. Titagarh Rail Systems Ltd.

A leading private manufacturer of freight wagons and passenger coaches for Indian Railways, Titagarh Rail Systems is known for its innovative designs. Along with focusing on manufacturing lightweight wagons, this railway sector company has actively participated in the "Make in India" initiative.

Proving to be a blockbuster stock, Titagarh Rail Systems has shown a wondrous 401.9% CAGR return in 2023. From the range of ₹220 in January 2023, it is now priced at ₹1106.25 as of 19 January 2024.

Titagarh Rail Systems is also well known for exporting rail equipment to several countries in Asia and Africa. With a ₹15,000 crore market capitalisation, the possibility of this railway stock reaching good heights seems to be increasing every day.

5. Ircon International

With a market capitalisation of over ₹24,000 crore, Ircon International is the master builder behind some of India's most crucial transportation arteries.

Short for Indian Railway Construction Company Ltd., it is a government-owned engineering & construction giant specialising in infrastructure development, particularly within the railway sector.

IRCON International has turned out to be a profitable bet for investors, providing a CAGR return of 274.4% in 2023.

IRCON's expertise isn't just limited to India. They've successfully completed projects in over 25 countries, from Malaysia and Nepal to Sri Lanka and Algeria.

6. Jupiter Wagons

Working as the muscle behind the strength, Jupiter Wagons specialise in manufacturing a diverse range of wagons, catering to every sector's transportation needs. Coal hoppers, flat wagons, tank wagons, you name it, they build it.

Renowned for its robust construction and high-tech features, Jupiter Wagons ensures safe and efficient cargo delivery over long distances. This underdog in the railway industry has not only contributed towards the railway sector but has also given profound returns to investors.

With a CAGR return of 265.5% in 2023, Jupiter Wagons has proved to be a diamond in the rough.

7. BEML

This railway stock is one of the most expensive additions to this list, and the stock price doesn’t seem to be slowing down anytime soon. For the past year, BEML has portrayed a 112.4% CAGR return by starting from the price of ₹1500 in January 2023 to now being available at ₹3192 as of 19 January 2024.

Formerly Bharat Earth Movers Limited, BEML is a PSU under the Ministry of Defence, which manufactures a wide range of products for the defence, aerospace, and infrastructure sectors. BEML also plays a significant role in supplying locomotives, coaches, and wagons for Indian Railways.

Other Stocks Making Waves in the Railway Sector

8. RITES Ltd.
9. Container Corporation of India
10. Railtel Corporation of India Ltd.

The Bottom Line

People have been leaning more and more towards the railway sector for investments, and this preference becomes crystal clear as the announcement for the interim budget gets close. So, why not participate in the trend and strengthen your portfolio for the best?

But don’t just depend on any list (even mine) blindly. Research all the crucial financial factors and look at growth prospects.

Happy Investing!

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Insider by Finology and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.