Best Railway Stocks in India (2024)

Last Updated on May 17, 2024 by Anjali Chourasiya

For many decades, the Indian railway industry has been the backbone of the country’s transportation system. So much so is the impact of the railways on the economy that in the recent Interim Budget 2024-2025, an allocation of Rs 2.55 lakh cr. to the Indian Railways, showcasing a 5.8% increase from the previous year’s estimate. The highly anticipated railway sector stocks received a significant boost from the news as many railway stocks saw the most significant gains, posting double-digit growth within a single month.

In this blog, we will explore a list of railway stocks in India and select the best railway stocks based on certain parameters.

Railway Stocks List With Price

Note: The railway shares list is derived from the Tickertape Stock Screener. The data represents railway share price list and is of 30th April 2024.

Best Railway Stocks in India – Updated April 2024

Note: The data is from 30th April 2024. The list of best railway stocks in India is derived from the Tickertape Stock Screener using the following criteria – 

• 1Y return – Med to high
• Fundamental Score – Sorted from high to low
• Fundamental Score: The score is a smallcase proprietary score between 1 and 10 assigned to stocks listed on the NSE. The score helps rank the stock over other stocks in the respective sector. The higher the score, the better the company. The score is calculated considering factors like valuation, profitability, market share growth, financial health and earnings growth of the company.

🚀 Pro Tip: Use Tickertape’s Portfolio Analysis to assess your investment portfolio’s diversification and performance.

Did You Know You Can Invest in Railway Stocks with smallcase?

Discover the convenience of investing in stocks through ready-made portfolios curated by SEBI-registered experts.

Before diving in, let’s understand what smallcase is.

smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts.

Among 500+ smallcases, here’s the top railway smallcases you can check out:

Omni Bullet Train-Great Indian Railways smallcase by Omniscience Capital

Omni Future of Mobility smallcase by Omniscience Capital

Disclosure for the mentioned smallcases

Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.

Overview of Best Railway Stocks in India

Indian Railway Catering and Tourism Corporation Ltd

Indian Railway Catering and Tourism Corporation Ltd (IRCTC) is a unique entity in the Indian Railways portfolio, operating in the online services sector. It facilitates online ticket booking, catering services, and packaged drinking water across the Indian Railways network. Moreover, IRCTC also promotes tourism through special train services and budget hotels. An interesting aspect of IRCTC is its monopoly over online railway ticket sales in India, making it a critical component of the railway infrastructure.

IRCTC recorded a market capitalization of Rs. 83,100.00 crore, with a stock price of Rs. 1,038.75, as of 30th April 2024. The company’s net income stood at Rs. 65.68 crore, and it achieved a remarkable return on equity of 1,005.87%, with a fundamental score of 46.26.

Rail Vikas Nigam Ltd

Rail Vikas Nigam Ltd (RVNL) focuses on the project execution and development of India’s railway infrastructure. It handles various projects, including railway lines, station modernisation, and bridge construction, under the aegis of the Ministry of Railways. RVNL’s role in enhancing rail connectivity and modernising existing infrastructure highlights its strategic importance in India’s transportation sector.

The company reported a market capitalisation of Rs. 59,714.98 crore and a stock price of Rs. 286.40 as of 30th April 2024. It posted a net income of Rs. 142.10 crore and an exceptionally high return on equity of 1,420.55%, alongside a fundamental score of 20.81.

Ramkrishna Forgings Ltd

Ramkrishna Forgings Ltd specialises in manufacturing forged and machined components for the rail, automotive, and oil & gas sectors. Beyond its presence in the rail sector, the company stands out for its diversification into manufacturing parts for heavy trucks, an area that complements its rail component manufacturing business.

As of 30th April 2023, the company noted a market capitalisation of Rs. 13,563.02 crore, with a stock price of Rs. 750.90. The net income was Rs. 127.96 crore with a return on equity of 248.12%, and a fundamental score of 20.68.

Jupiter Wagons Ltd

Jupiter Wagons Ltd is engaged in the manufacture of railway wagons, tankers, and coaches. It also ventures into manufacturing components for the defence sector. Jupiter Wagons is noteworthy for its collaborations and joint ventures with global leaders in wagon manufacturing, enhancing its technological capabilities and product offerings.

The company had a market capitalization of Rs. 16,840.13 crore and a stock price of Rs. 408.45, as of 30th April 2024. Its net income reached Rs. 274.55 crore, a return on equity of 120.78%, and a fundamental score of 16.25.

Indian Railway Finance Corp Ltd

Indian Railway Finance Corp Ltd (IRFC) plays a pivotal role as the financing arm of the Indian Railways. It raises financial resources from domestic and international markets at competitive rates and terms for funding growth and operations of the Indian Railways. IRFC’s financial strategies and operations are crucial for maintaining the liquidity and financial health of the railways.

IRFC boasted a market capitalisation of Rs. 205,502.26 crore and a stock price of Rs. 157.25, as of 30th April 2024. It recorded a net income of Rs. 368.70 crore and an exceptionally high return on equity of 6,337.01%, with a fundamental score of 14.66.

Titagarh Rail Systems Ltd

Titagarh Rail Systems Ltd is primarily involved in manufacturing passenger and freight trains, metro coaches, and heavy engineering equipment. The company has expanded its footprint by acquiring manufacturing facilities in Italy and France, aiming to enhance its presence in the European market.

As of 30th April 2024, the company held a market cap of Rs. 14,246.46 crore and a stock price of Rs. 1,057.85. It reported a net income of Rs. 218.44 crore, a return on equity of 130.21%, and a fundamental score of 14.42.

BEML Ltd

BEML Ltd is a public sector undertaking with a focus on manufacturing rail coaches and spare parts, and mining equipment. BEML is also involved in the defense sector, producing vehicles and weapons for India’s defense forces. Its dual focus on rail and defense sectors makes it a significant player in both industries.

As of 30th April 2024, the company reported a market capitalisation of Rs. 14,606.60 crore and a stock price of Rs. 3,507.45. The company’s net income was Rs. 184.02 crore, with a return on equity of 157.93%, and a fundamental score of 6.61.

Texmaco Rail & Engineering Ltd

Texmaco Rail & Engineering Ltd operates across the rail infrastructure, rolling stock, and steel foundry segments. It manufactures a variety of wagons, coaches, and cast steel components, playing a critical role in India’s efforts to enhance its freight and rail infrastructure.

As of 30th April 2024, the company had a market capitalisation of Rs. 7,280.29 crore and a stock price of Rs. 182.25. The net income stood at Rs. 216.13 crore, with a return on equity of 26.01%, and the lowest fundamental score of 1.91 among the listed companies.

About Indian Railway Sector 

With over 1.4 mn employees, the Indian railway industry is the major contributor to the nation’s economy. It is the fourth largest railroad network in the world and spans thousands of kilometers, covering far-fledged regions nationwide. 

Scope of the Indian Railway Industry in 2024

The Interim Budget 2024-25 has allocated Rs 2.55 lakh cr. to the Indian Railways, showcasing a 5.8% increase from the previous year’s estimate. Finance Minister Nirmala Sitharaman, in her commitment to enhancing the country’s rail infrastructure, announced the launch of three major economic railway corridor programs. These initiatives, designed to streamline energy, mineral, and cement logistics, improve port connectivity, and upgrade high traffic density corridors, are pivotal under the PM Gati Shakti plan for multi-modal connectivity. This strategic move aims at boosting logistics efficiency and reducing operational costs across the board.

Further, the budget will facilitate the acquisition of modern Vande Bharat trains, expansion and doubling of rail tracks, and the nationwide implementation of the Kavach safety system. An ambitious upgrade will see 40,000 rail bogies enhanced to Vande Bharat standards, prioritising passenger safety and comfort. Reflecting on fiscal prudence and strategic investment, the railways reported a historic high in capital expenditure, underscoring a robust growth trajectory aligned with the National Rail Plan 2030. This plan envisions a substantial increase in freight capacity, setting a dynamic course for the future of Indian Railways.

Advantages of Investing in Railway Stocks

Here are some reasons why investing in railway stocks may be a lucrative opportunity – 

1. Government support: The Indian government’s commitment to improving the country’s transportation infrastructure is evident from the increased allocation of funds for the railways in the Interim Budget. This provides a stable foundation for railway stocks and gives investors confidence in the sector’s growth potential.
2. Diverse projects: The new projects for FY 2024-25 includes three major economic railway corridor programs. These initiatives, designed to streamline energy, mineral, and cement logistics, improve port connectivity, and upgrade high traffic density corridors, are pivotal under the PM Gati Shakti plan for multi-modal connectivity.
3. Passenger expectations: With increased passenger expectations, the railways plans to refurbish 40,000 rail bogies similar to Vande Bharat standards, prioritising passenger safety and comfort. The upgraded interiors with a modern look will enhance passenger comfort and satisfaction, which could translate into higher demand for railway services.
4. Long-term investment option: Railway stocks are typically viewed as long-term investments, as the infrastructure required for the railway system takes time to build and maintain. It allows investors to invest in a sector that is likely to grow steadily over the long term.

Risks of Investing in Indian Railway Sector Stocks

Investing in Indian railway stocks, including both blue-chip and penny stocks, comes with its fair share of risks that investors must carefully consider. Here are some key risks to be aware of when exploring the railway stock market in India:

• Economic downturns impact on demand: The demand for railway services is closely tied to the overall economic conditions. During economic downturns, reduced business and consumer spending can lead to a decline in passenger and freight traffic, negatively impacting the revenue and profitability of railway stocks.
• Policy and regulatory shifts: The railway sector is heavily influenced by government policies and regulations. Changes in policies, such as fare structures, subsidies, or infrastructure development plans, can significantly affect the financial performance of railway stocks.
• Emerging competition from road and air transport: While the Indian Railways maintains advantages in terms of capacity and cost-effectiveness, the sector faces growing competition from alternative modes of transportation like roads and air travel. This can put pressure on railway stocks’ market share and pricing power.
• High debt levels in some companies: Certain railway companies, especially those involved in infrastructure projects, can carry high debt levels. This can expose them to interest rate risks and debt servicing challenges, potentially impacting their stock performance.
• Cyclical nature of the industry: The railway industry tends to be cyclical, with periods of growth and decline. Investors must be mindful of these industry trends and align their investment decisions with their risk tolerance and long-term goals.
• Volatility in railway penny stocks: While railway penny stocks may offer the potential for higher returns, they also carry greater volatility and risk. These low-priced shares can be susceptible to market fluctuations, making them a riskier investment option compared to established railway stocks.

To navigate the risks in the Indian railway stock market, investors should conduct thorough research, diversify their portfolios, and consider factors like government policies, financial health, and industry trends before making investment decisions. Consulting with financial advisors can also provide valuable insights to make informed choices.

How to Invest in the Best Railway Stocks in India?

Investing in the Indian railway sector presents a unique set of challenges and opportunities for investors. To navigate this market effectively, it’s essential to combine research and education with a solid understanding of financial analysis, market trends, diversification strategies, and the use of investment tools.

• Research and education: Before investing in Indian railway stocks, it’s crucial to conduct thorough research on the companies, industry trends, and market dynamics. This includes analysing financial reports, tracking records, growth prospects, and competitive positioning of railway companies to make informed investment decisions. Staying up-to-date with the latest news, trends, and regulatory changes is also vital for investors.
• Financial analysis: A deep understanding of financial analysis is essential for evaluating the performance and potential of railway stocks. This includes analysing key metrics such as revenue growth, profit margins, return on equity (ROE), and debt-to-equity ratios to assess a company’s financial health and stability. By conducting thorough financial analysis, investors can identify undervalued or overvalued stocks and make informed investment decisions.
• Market trends: Staying informed about market trends and sentiment is critical for investors in the Indian railway sector. This includes tracking market indices, sector performance, and regulatory changes that may impact railway stocks. By staying attuned to market trends, investors can adjust their investment strategies to capitalise on opportunities and mitigate risks.
• Diversification: Diversifying your investment portfolio across a range of railway stocks can help spread risk and capture opportunities in different segments of the railway sector. By diversifying, you can balance potential returns and risks associated with individual companies. This includes investing in a mix of blue-chip and penny stocks, as well as exploring different railway sectors such as passenger and freight services.
• Use of Investment Tools: Tickertape Stock Screener features over 200+ filters, allowing investors to narrow down their search effectively across various parameters like financial ratios, company fundamentals, and stock performance metrics. Additionally, it offers the capability to create custom filters, giving users the flexibility to tailor their screening criteria to fit specific investment strategies or needs. Filter your favourite railway stocks now! 

Additional Considerations

In addition to the above, investors should also consider the following:

• Risk Management: Implementing risk management strategies such as setting stop-loss orders, diversifying your portfolio, and monitoring market trends to protect your investments and optimise returns.
• Long-Term Perspective: Investing in the Indian railway sector requires a long-term perspective to ride out market fluctuations and benefit from the sector’s growth potential.
• Regulatory Environment: Staying informed about regulatory changes and their potential impact on railway stocks is essential for investors.
• Industry Developments: Keeping up-to-date with industry developments, such as infrastructure projects and government initiatives, can help investors identify opportunities and potential risks.

By combining research and education with a solid understanding of financial analysis, market trends, diversification strategies, and the use of investment tools, investors can navigate the Indian railway sector with confidence and potentially achieve their investment goals.

Conclusion

Introducing new projects, refurbishing premier coaches, and increasing the allocation of funds for track renewal in the Union Budget presents a compelling opportunity for investors looking to diversify their portfolios and benefit from the growth potential of the railway sector. Additionally, the government’s commitment to improving the country’s transportation infrastructure provides a stable foundation for railway stocks, making them a promising investment opportunity.

FAQs

Which is the best railway stock in 2024?

Based on Fundamental Score, Indian Railway Catering and Tourism Corporation Ltd and Rail Vikas Nigam Ltd generated double-digit returns, outperforming other railway stocks in India.

Among the railway stock list, which railway stock has generated the highest returns in the last 1-yr?

Indian Railway Finance Corp Ltd recorded an exceptional growth of 429.33% in the last 1-yr.

How do railway stocks perform compared to other sectors in India?

Railway stocks often perform differently compared to other sectors due to their heavy reliance on government policies and infrastructure spending. While not as volatile as tech stocks or as affected by commodity prices like the energy sector, railway stocks offer stability and steady growth potential, making them attractive during periods of economic expansion and increased infrastructure investment.

What factors should one consider when investing in railway stocks in India?

When investing in railway stocks in India, consider factors such as the company’s role in infrastructure development, government partnerships, financial health, and historical performance. Additionally, assess market trends, future growth potential in the sector, and any regulatory changes that could impact the industry. Such thorough analysis may help in identifying stocks with strong potential for returns.

Are there any railway penny stocks in India?

Railway penny stocks refer to shares of smaller-cap companies within the railway sector that trade at low prices. While less common due to the capital-intensive nature of the railway industry, investors can find penny stocks in associated sectors such as component manufacturing and small-scale service providers. Investors should approach these cautiously, considering their higher volatility and lower market liquidity. It is always worthwhile to consult a financial advisor before investing.

Discover Related Stock Collections

Check out our other stock collections that may be of interest to you:

• Author
• Recent Posts

Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.

Latest posts by Harshit Singh (see all)

• Best Gold Stocks in India for 2024 - Jun 4, 2024
• PE Ratio of Nifty 50 Stocks (2024) - May 23, 2024
• Nifty 50 Stocks With 1-Month High Return - May 23, 2024