The railway sector is undergoing a major transformation as the government focuses on enhancing the lower segment. This involves the production of 10,000 non-AC coaches in the next two years, including 3,500 general seating coaches, 2,060 three-tier sleeper coaches, and 18 coaches for Amrit Bharat. Understanding the companies involved in this production and their order books is crucial for making informed investment decisions.
Stocks Involved in Railway Sector Production:
- Titagarh Rail Systems: A Key Player
– Overview: Established in 1997, Titagarh Rail Systems is a prominent manufacturer in the railway sector, producing wagons, passenger coaches, metro trains, and steel castings.
– Order Book: The company has a diversified order book with 46% from passenger rolling stock and 54% from freight rolling stock, totaling ₹6,750 crores.
– Revenue Breakdown: Passenger rolling stock contributes 19% to total revenue, highlighting potential growth in this segment.
– Technical Analysis: The stock shows a consistent sideways movement with a recent green candle formation, suggesting a potential breakout.
- BEML: Diversified Operations
– Overview: BEML operates in defence, railways, and construction & mining sectors.
– Order Book: For 2021-2024, BEML's order book is ₹4,867 crores, with 41% of revenue from railway and metro segments.
– Technical Analysis: The stock chart displays an inverted head and shoulders pattern with a recent breakout, indicating a strong upward trend.
- IRFC: Financial Backbone
– Overview: Indian Railway Finance Corporation (IRFC) provides crucial financial assistance for railway projects.
– Financial Role: Registered with the RBI and operating under the Ministry of Railways, IRFC's loan disbursement and lease receivables play a critical role in supporting the railway sector.
– Technical Analysis: The stock shows a breakout from a prolonged sideways movement, indicating a potential upward trend.
Conclusion
The government's focus on the lower segment of the railway sector presents significant growth opportunities. Key players like Titagarh Rail Systems and BEML, supported by IRFC, are well-positioned to benefit. Investors should monitor these companies' order books, revenue figures, and technical indicators to make informed decisions.
