Railways is one of the most crucial transportation in India. It is a very popular and common mode of transport among the people. Indian Railways is one of the largest rail networks in the world. It spreads over 67,000 kilometers across the country, covering both rural and urban areas. Investing in Railway stocks at this time can be a milestone for Investors. In this blog, we will cover the best railway stocks in India.
The railway network plays a significant role in connecting people and carrying goods. Being cost-efficient, it is easily accessible to a vast range of people. It is under the Government of India and managed by the Ministry of Railways.
The railway industry contributes significantly to India’s economy. It facilitates tourism, trade, and employment opportunities. The Indian railways comprise a diverse range of trains. It includes passenger trains, freight trains, and suburban trains.
What are Railway Stocks?
The Indian railways started in the mid-19th century, during British rule. The first passenger train ran between Mumbai and Thane in 1853. Since then, the Railway industry has seen consistent growth.
Railway stocks are the shares of companies operating railroad networks. Shareholders gain ownership in the railway company along with potential dividends and capital gain.
Why should you invest in Railway Stocks?
Railway stocks can be an interesting option for those looking for investment in the transportation sector. Several reasons that make railway stocks a compelling choice are:
- Consistent demand- Railways are always in demand. Even during economic downturns, there is always a need for passenger trains and freight trains (for carrying goods like coal, etc).
- Cost-efficiency- Railways are generally more cost-efficient. Rail transport is comparatively affordable for carrying goods over long distances. It is more fuel-efficient compared to other modes of transport.
- Essential industry- Rail transport is an important part of infrastructure. This industry has good government support, enhancing the stability of railway stocks.
- Growth potential- Increasing urbanization and a growing economy led to expanding rail networks. Growing demand for railway services presents new opportunities for railway companies. They expand their operations to improve profitability.
- Diversification- You can diversify your portfolio by investing in railway stocks. It can provide exposure to different sectors of the economy.
List of best Railway Stocks in India
Here we will discuss the top railway stocks in India that have the potential to give massive returns in upcoming years:
1) RVNL
Rail Vikas Nigam Limited (RVNL) was established in 2003. The company is under the Ministry of Railways, Government of India. RVNL works to improve connectivity and transportation infrastructure across the country.
The company works on various railway projects. It includes new line construction, station redevelopment, and modernizing railways.
RVNL’s financial performance is associated with government funds and expenditures on railway infrastructure. The company generates its revenue from projects and consultancy services.
The company’s profit doubled in the last five years from Rs 10,324 Cr to Rs 21,278 Cr. RVNL has provided nearly 2500% returns in the last five years. RVNL’s order book has touched the figure of Rs 65,000 Cr which is more than double of its profit in FY 2024. It has very strong fundamentals that make it the Best Railway stock in India.
2) IRFC
The Indian Railway Finance Corporation (IRFC) was incorporated in 1986. IRFC is a prominent entity in India’s railway sector. Its administrative control is under the Ministry of Railways, Government of India. It significantly contributes to the country’s economic growth.
IRFC raises funds from the market to meet its finances. It is involved in the leasing of railway infrastructure and various other railway operations. It plays a key role in the expansion of the Indian rail network. IRFC supports financially for modernization and development of railways.
The company consistently had good credit ratings. This shows its strong financial position in the market. Being backed by the Indian Government enables it to raise sufficient funds. IRFC has given multi-bagger returns to its investors which is around 723% in the last five years. Many Investors and firms have given targets of up to Rs 600 in IRFC stocks till 2025. IRFC’s profit has been three-fold in the last five years.
3) Titagarh Railsystems
Titagarh Railsystems is a key player in Indian Railways. The company was founded in 1997. It is one of the notable wagon manufacturers in the country. Primarily it caters to the Indian market. It also exports railway rolling stocks to other countries.
The company manufactures railway rolling stock. It includes passenger coaches, freight wagons, and other railway components. Titagarh has also expanded its business into shipbuilding and engineering. The company regularly analyzes its financial performance with a strong dedication to enhancing efficiency and profitability.
Titagarh Railsystems has witnessed growth in domestic as well as international markets. The company’s stocks have given massive returns to its investors which is around 3900% in the last five years. Share prices have jumped from Rs 50 in 2021 to Rs 1800 in 2024. FIIs have increased their holding up to 10% in the last 1 year. Analysts have given a Buy Rating in Titagarh.
4) IRCTC
The Indian Railway Catering and Tourism Corporation is a subsidiary of Indian Railways. It was established in 1999. It is under the Ministry of Railways. IRCTC has a mobile app. It allows users to book tickets, check PNR status, and access other services.
IRCTC offers various services like online ticket booking, catering, and tourism services. To cater to increased passenger demand, it operates several special trains. It is mainly during festivals and peak seasons.
IRCTC has shown significant performance over the years. It is driven by its online ticket booking services and tourism facilities. The company continues to focus on enhancing its services. It is evolving with advancing technologies to cater needs of passengers.
IRCTC has given around 700% returns in the last five years. IRCTC’s stocks were in a boom in 2021. Currently stock is revolving around its all-time high. FIIs and DIIs continue increasing their stake in IRCTC which is a bonus point for IRCTC.
5) IRCON International
IRCON International Limited is an engineering and construction company in Railways and highways. It was founded in 1976. It is a government-owned subsidiary of Indian Railways. IRCON has a significant presence in India and other countries.
IRCON deals in construction and infrastructure projects. This includes railways, highways, bridges, and tunnels. The company has also executed projects in over 30 countries. Some of its projects in India are Delhi Metro and Konkan Railway. Apart from these, it also engages in airports and renewable energy.
IRCON has a good financial record. It is a profit-making entity listed on the NSE and BSE. The company continues to expand globally. It has major contributions to India’s infrastructure development goals. IRCON has given around 700% returns in the last five years. company’s profit is increasing on a YoY basis. Top Mutual Funds like Quant have held up to 5% in this stock which makes it one of the best railway stocks in the Railway sector.
6) RITES
RITES Limited was established in 1974. It is under the Ministry of Railways, Government of India. It is a leading Indian engineering consultancy company. The corporation stabilizes in transport infrastructure. It is listed on the NSE and BSE. Its shares are actively traded.
RITES offers a wide range of services. These services include railways, highways, and airports. The company also deals in leasing locomotives, wagons, and coaches to Indian railways. It exports rolling stocks and equipment. RITES has a good international presence. It has a strong financial track record. With well-planned strategies and innovations, RITES is poised for growth.
RITES’s order book stands at around 6500 Cr. which is more than double its revenue of around RS 2500 Cr. FIIs and DIIs have increased their stake in recent months. With strong fundamentals and high growth potential, this stock is one of the best railway stocks for investors.
7) Jupiter Wagons
Jupiter Wagons Limited is an Indian automotive industry. It specializes in railway wagons and other equipment. The company was established in 1986. It contributes significantly to the development of railway infrastructure in the country.
Jupiter Wagons produces different types of railway wagons. It includes:
- Passenger coaches for carrying people. It has both luxury and general coaches.
- Freight wagons For carrying goods and materials.
- Special wagons Designed for carrying tankers and containers.
The company witnessed significant growth over the years. It is consistently expanding its offerings and market range. Jupiter Wagons Ltd has a strong financial record. It supports the infrastructure development of the Indian rail network.
8) Texmaco Rail and Engineering
Texmaco Rail & Engineering Limited was founded in 1958. The headquarters are in Kolkata, West Bengal (India). It is considered one of the leading entities in Indian railways. It has significant contributions to India’s railway modernization and development.
The company deals in various kinds of railway wagons. These are Freight coaches, passenger coaches, and engineering products. It primarily caters to Indian railways. The company offers its products and services to the international market.
Texmaco has shown good financial growth. It has a presence in both domestic and international markets. The company actively invests in research and innovations. It constantly works towards expanding itself and technological advancements. The company has delivered massive more than 450% returns in the last five years.
Want to earn more money: Explore the top dividend stocks in India
Future Trends and opportunities for Investing in Railway stocks
- Urbanization: With growing urbanization, there is a rising need for transportation. Investing in railway stocks can be advantageous as there are so many people traveling. This raises the need for more passenger trains.
- Transportation: Railways are considered an eco-friendly mode of transport. Due to this, railways are likely to receive more support and funding. This makes railway stocks a good investment.
- Technological Advancements: Innovations are transforming the railway industry. Companies investing in new technologies can experience growth. Investing in stocks of companies leading these advancements could be profitable.
- Infrastructure Development: Many countries are investing heavily in railway infrastructure. This includes new lines and updating the existing ones. These investments can lead to increased business for railway companies, improving their stock values.
- Global Growth: With expanding global trade, there is a higher demand for efficient freight transport. Railways play a key role in moving goods across long distances. Companies involved in freight rail services may experience growth. This provides potential returns for investors.
Conclusion
The railway sector is an important component of transport infrastructure. It provides services that are essential for economic growth. Investors seeking railway stocks should consider various factors before making a decision. Analyze the company’s resilience, efficiency, and growth potential.
Investors must choose a stock after assessing these factors carefully. This will help in making an informed decision. Hence, Investors can enjoy opportunities offered by the railway sector.
