In Trade Today Rail Stocks Rallies On the Reforms

Shares of railway associated companies mainly small-sized like Texmaco Rail & Engineering, Titagarh Wagons, Kalindee Rail Nirman (Engineers), Stone India and Kernex Microsystems were up between 3% and 9% on the NSE in an otherwise subdued market.

Titagarh Wagons sneak peak:

Titagarh Wagons share price has rallied 8.30 per cent to Rs 130.35 on NSE in intra-day, extending its Thursday’s gain on back of heavy volumes after reporting a good set of numbers for the quarter ended September 30, 2016 (Q2FY17). At 11:46 AM, over three lakh shares were traded and the stock was trading at Rs. 120 with the rise of approximately 4 per cent.

Titagarh Wagons had posted the net profit of Rs 5.24 crore in Q2FY17 compared with net profit of Rs 0.19 crore in Q2FY16. Total income from operations surged to Rs 98.80 crores in Q2FY17 from Rs. 82.36 in Q2FY16. On December 10, the company announced that it has bagged an order for construction of two fuel barges for the Indian Navy in its recently added ‘Shipbuilding’ vertical.

Earlier, the company has been recognized with registration by the Ministry of Defence (Navy), Directorate of Ship Production for undertaking construction of Non-Weapon Platforms up to 120 m length and for all types of Yardcraft through communication handed out by the said authority on December 07, 2016. Titagarh Wagons designs and manufactures wagons and coaches, specialized equipments & bridges and heavy earth moving machineries, ship building etc. Titagarh Wagons is the Top 500 performing stock for the quarter as picked by Dynamic Levels.

Texmaco Rails Insight:

On 27th October, Texmaco Rail had posted the massive rise in its Q2 net profit. The company reported the net profit at Rs. 17.07 crores as compared to 2.36 crores in the corresponding quarter last financial year. The total income from operations was seen at Rs. 236.57 crores in the Q2FY17 as compared to Rs. 154.52 crores in the same quarter last financial year.

Texmaco rail share price gained almost 5 per cent in today’s trade at NSE, trading at the intraday high of Rs. 115.90 from the previous close of Rs. 110.50. It is yet another top 500 stock recommended by Dynamic Levels for the quarter.

Kalindee Rail:

Kalindee Rail had posted the net profit of Rs. 1.15 crores in the September quarter of the ongoing financial year as compared to the loss of Rs. 8.07 crores in the corresponding quarter last financial year. Kalindee’s sales have improved considerably in the Q2FY17, standing at Rs. 128.36 crores as compared to Rs. 82.73 crores in the same quarter previous financial year.

Today, Kalindee Rail share price gained 4.79 per cent and traded at the intraday high of Rs. 121.20 as compared to the previous close of Rs. 115.65. Kalindee Rail is also the Top 500 pick by Dynamic Levels for the quarter.

What’s driving the rally?

Before the month of November ended, it left good news with the rail sector. The news came that China could help India upgrade its ailing railway infrastructure given New Delhi is open to Chinese investment in the sector. This came as a reprieve as the number of accidents happening in the sector has hiked of late. China is quite experienced in financing and developing railway technology, which can possibly be used as a reference for speeding up construction in the south Asian country. Some east African countries, including Tanzania, are reportedly inclined to adopt a Chinese model for the development of their rail systems. Following the Indore-Patna Express derailment, India and China might speed up cooperation in infrastructure and China could offer direct support for upgrading India’s railways.

It was only in August that China’s largest high-speed train and railway equipment maker announced that its first joint venture in India had been commenced in Haryana. It was for the first time that China Railway Rolling Stock Corporation (CRRC), a colossal state-owned enterprise (SOE) in China with more than 1,75,000 employees, had set up a joint venture in South Asia.

Also, on 14th December, expressing alarm over loss of lives due to train accidents, a parliamentary panel has suggested setting up a separate safety fund by the Railways and appointing a Member (Safety), who is exclusively entrusted with ensuring security of rail passengers.

Standing Committee on Railways in its latest report tabled in Parliament, has recommended reviewing the current structure of Railway Board as well as zonal and divisional levels. The committee suggested that the Railways need to gear up and overcome the challenges before them to achieve higher level of safety by addressing the basic reasons of accidents. This will help in coordinating micro-level safety measures into holistic and macro-level safe rail operations. All these reforms have pushed the rail stocks up.

With so much reforms going in the rail sector in India, the market might be able to see more bounces in the prices of the rail stocks. It is a good idea to keep an eye on these stocks as well.

A writer by day and a passionate reader by night. Writing just doesn't fill my pocket but it also fills my heart. Passion for writing about new events & happenings is what soothes my mind & soul.