Top Railway Stocks in India

India’s railway network is a testament to the country’s infrastructure prowess. As the world’s fourth-largest railway system, it spans nearly the entire nation, playing a vital role in economic development. The Indian Railways, under the stewardship of the Railway Board, is the sole provider of rail services across the country. Known for its efficiency and affordability, it remains the preferred mode of transport for millions of Indians, especially for long-distance travel.

With a vast network of over 65,000 kilometres of routes and 102,000 kilometres of tracks, the Indian Railways employs over 1.4 million people, making it India’s largest employer. The recent Union Budget 2024 has provided a significant boost to the sector, with a massive allocation of INR 2.55 lakh crore for the fiscal year 2024-25. This substantial investment is expected to drive significant growth and development in the Indian Railways.

Let’s explore some of the top railway stocks in India that have gained momentum following this historic budget allocation.

What Makes Railway Stocks Irresistible?

As India’s population and economy continue to grow, the demand for efficient transportation, particularly rail services, remains strong. The extensive Indian railway network, coupled with increasing public and private sector investment, positions railway stocks as promising long-term investments.

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Top Railway Stocks in India by Market Capitalization June 2024

Company Name	Market Cap (cr.)	P/E Ratio	Net Income (cr.)	5 Year Sales CAGR (%)	Up/Down from 11 Jun 2024 (%)
IRFC	189,610	31.00	6,412.0	19.10	-8.7
RVNL	90,085	72.70	1,463.0	16.60	-8.7
IRCTC	64,016	57.00	1,111.0	18.00	-4.2
CONCOR	47,845	40.40	1,262.0	4.46	-7.7
IRCON	17,736	21.30	930.0	20.80	-14.6
BEML	15,402	60.20	282.0	3.14	-9.7
Titagarh Wagons	14,978	53.60	286.0	19.80	-10.1
RITES	13,205	35.60	495.0	3.68	-9.0
RailTel	11,920	47.60	246.0	21.10	-11.9
Texmaco Rail	7,966	43.10	113.0	13.50	-9.5

Profits are calculated based on the current price and as of 11 June 2024

Best Railway Stocks in India

Now, let us embark on a journey through the realm of India’s leading railway companies, where we shall evaluate their prominence based on Market Capitalization.

#1 Indian Railway Finance Corporation (IRFC) – The Leading Force in Top Railway Stocks in India

Indian Railway Finance Corporation (IRFC) is a key financial institution dedicated to the growth and modernization of the Indian Railways. Established in 1986 under the Ministry of Railways, the IRFC plays a crucial role in financing the railway sector’s capital expenditure.

By raising funds from the market through bonds, loans, and lease financing, IRFC acquires and leases railway assets to Indian Railways. This innovative approach ensures a steady flow of capital, enabling the railway network to expand and improve its infrastructure. With a strong track record and a deep understanding of the railway sector, IRFC has solidified its position as a leading non-banking financial company (NBFC) in India.

IRFC reported strong financial performance in FY 2023-24. Revenue increased by 12.32% to INR 26,644.58 crore, and net profit grew by 3.97% to INR 6,412.10 crore. The company has efficient cost management, resulting in an operating profit of approximately INR 26,512 crore. Total borrowings reached INR 4,12,032 crore, with an average borrowing cost of 7.27% per annum. IRFC has shown remarkable growth, with revenues soaring at a swift compound annual growth rate (CAGR) of 19.1% over the last five years.

#2 Rail Vikas Nigam (RVNL) – Transforming India’s Rail Infrastructure

RVNL, a Government of India enterprise established in 2003, has become a key player in India’s railway infrastructure development. Tasked with executing various railway projects assigned by the Ministry of Railways, RVNL has been instrumental in expanding, electrifying, and modernizing the nation’s railway network. The total order book of RVNL is INR 85,000 crore in FY 2024.

RVNL reported a strong FY2024, with revenue surging to INR 21,733 crore, a significant increase year-over-year. This growth translated to a robust net profit of INR 1,463 crore, resulting in an EPS of INR 7.02. The company’s consistent performance is evident in its 5-year CAGR of 16.60% in revenue growth. These positive financial indicators position RVNL favourably to capitalize on future opportunities in the Indian railway infrastructure sector. Additionally, with a dividend yield of over 0.46%, RVNL stands among the top railway stocks in India.

#3 Indian Railway Catering & Tourism Corporation (IRCTC):  A Premier Choice Among the Best Indian Railway Stocks in India

Indian Railway Catering & Tourism Corporation (IRCTC) is a subsidiary of Indian Railways responsible for managing catering, tourism, and online ticketing services. Established in 1999, IRCTC is headquartered in New Delhi.

IRCTC operates a vast network of catering units, including base kitchens, mobile catering units, and pantry cars, to provide high-quality meals to passengers on trains. Additionally, the company manages food stalls, restaurants, and luxurious tourist trains such as the Palace on Wheels, Maharajas’ Express, and Buddhist Circuit Tourist Train. With a sales compound annual growth rate (CAGR) of 18% over the last five years and a PE Ratio of 57.0, IRCTC shines as one of the best railway stocks in India.

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#4 Container Corporation of India (CONCOR): The Backbone of Indian Logistics

CONCOR, a leading Indian logistics company, has been a cornerstone of India’s cargo transportation landscape since 1988. As a government-owned entity, CONCOR offers a comprehensive range of logistics solutions including containerized cargo transportation, handling, storage, and value-added services.

With a strong network spanning coastal and inland locations, CONCOR is committed to providing efficient, reliable, and cost-effective logistics solutions to its customers.

In Q2 FY2024, Container Corporation of India Ltd. (CONCOR) reported a revenue of INR 2,103 crore and a net profit of INR 259 crore. For the fiscal year 2024, CONCOR’s earnings per share (EPS) improved to INR 20.69, up from INR 19.27 in FY2023. Additionally, the company has achieved a compound annual growth rate (CAGR) of 4.46% in revenue over the past five years.

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#5 Ircon International (IRCON): Best in Engineering From Top Railway Companies in India

Ircon International, a Government of India enterprise established in 1976, is a leading engineering and construction company. Headquartered in New Delhi, Ircon operates in various sectors including railways, highways, bridges, tunnels, airports, metro systems, and buildings. With a strong domestic and international presence in 21 countries, Ircon specializes in executing complex projects, particularly in the railway sector. The company’s expertise extends to constructing new railway lines, electrification, signalling, and other infrastructure projects, including dedicated freight and high-speed rail corridors in India. With a rapid CAGR of 20.80% over 5 years, the company consistently sees growth in both revenues and net profits.

#6 Bharat Earth Movers (BEML)

BEML, a government-owned company established in 1964, is a key player in India’s core sectors like defence, rail, power, mining, and infrastructure. Initially focused on producing rail coaches and spare parts, BEML has expanded its operations significantly. The company is listed on both BSE and NSE and has a diverse shareholder base. Despite starting with a modest turnover of INR 5 crore in 1965, BEML achieved its highest-ever turnover of INR 4,054 crore in FY 2024.

The price-to-earnings (PE) ratio stands at 60.5, indicating a relatively high valuation. Over the past five years, the company has recorded a compound annual growth rate (CAGR) in sales of 3.14%, reflecting its ongoing efforts to stabilize and grow its operations in a competitive market.

#7 Titagarh Rail Systems

Titagarh Rail Systems formerly known as the Titagarh Wagons, founded in 1997, is a leading Indian engineering company specializing in manufacturing railway wagons, steel castings, and heavy engineering products. Headquartered in Kolkata, the company designs develops, and produces a diverse range of railway wagons, including freight, tank, special-purpose wagons, and metro coaches. In addition to railway wagons, Titagarh Wagons manufactures steel castings for various sectors like railways, automobiles, power plants, and general engineering.

Titagarh Rail Systems, with manufacturing units in West Bengal, Uttarakhand, and Maharashtra, holds a significant presence in India. Titagarh Rail Systems delivered solid Q2 FY2024 results. Total revenue reached INR 1,057 crore, and net profit stood at INR 67 crore. The company’s strong financial performance is reflected in its 25% return on capital for FY 2024.

However, a PE ratio of 53.7 might indicate a premium valuation. With a substantial order book of INR 28,000 crore as of 30 September 2024, Titagarh Rail is well-positioned for future growth and revenue visibility. The company reported a 5 year sales growth at a CAGR of 19.80%.

#8 Rail India Technical and Economic Service (RITES)

RITES, a leading public-sector enterprise established in 1974, is a prominent player in India’s transport consultancy and engineering sector. With a diverse range of services and a global presence, RITES is the exclusive export arm of Indian Railways for rolling stock, excluding Thailand, Malaysia, and Indonesia. The company offers a high dividend yield of over 3.95% and has consistently grown its revenue at a CAGR of 3.68% over the past 5 years.

#9 RailTel Corporation of India

RailTel Corporation of India, a Mini Ratna public sector enterprise established in 2000, provides a wide range of telecom and networking services to Indian Railways, government organizations, and private clients.

These services include high-speed internet, VPN, leased lines, video conferencing, data centre services, network management, and passenger services like content-on-demand and Wi-Fi at major railway stations. RailTel’s extensive fibre optic network spans over 61,000+ route kilometres, connecting more than 6,108+ railway stations across India. It trades at a high PE of 47.6 with a sales growth at a CAGR of 21.10% in the last five years.

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#10 Texmaco Rail & Engineering

Texmaco Rail & Engineering, a leading Indian engineering company, specializes in manufacturing railway rolling stock and infrastructure. Established in 1939 and headquartered in Kolkata, Texmaco offers a comprehensive range of railway products and services, including wagons, coaches, locomotives, and components.

The company’s robust presence in both domestic and international markets, coupled with a strong focus on innovation through its R&D division, positions it as a key player in the global railway industry. As part of the Adventz Group, led by Saroj Poddar, a conglomerate with diverse interests, including agrochemicals and real estate. The company recorded a high PE of 43.1 and sales growing at a CAGR of 13.50% in the last five years.

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Conclusion

The railway industry anticipates significant growth in the upcoming years, presenting expanded opportunities for businesses. Positioned at the brink of a revolution, the railway sector in India, whether through the introduction of high-speed trains or stake sales, is set for substantial advancement. This trajectory indicates massive growth opportunities for the companies covered in this article.

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