State-run railway stocks have seen a major rally since the last budget announcement on July 5, 2019. They have also outperformed the benchmark indices in this period. While the BSE Sensex has gone up nearly 4 percent since the last budget, all the PSU railway stocks have delivered double-digit returns.

Share Market Live

NSE

Among PSU stocks, Ircon has rallied 19 percent since July 5 last year, Rites has surged 36 percent in the same period. Meanwhile, IRCTC — which made its market debut on October 14, 2019 — has jumped nearly 250 percent against its issue price of Rs 320, currently trading over Rs 1,100 per share.

From the private sector, Hind Rectifiers has surged nearly 100 percent, while Siemens added 21 percent. However, Larsen & Toubro, Kernex Microsystems, NBCC, and Texmaco Rail were down in the range of 13 percent to 41 percent since July 5, 2019.

Read more: Budget 2020: Indian Railways again expects highest capex outlay

This year, Indian Railways is again expecting the highest-ever outlay for capital expenditure of over Rs 1.70 lakh crore from Union finance minister Nirmala Sitharaman, who will present the Budget on February 1. A senior railway ministry official told IANS that the railways had received capital expenditure of Rs 1.60 lakh crore in last year's budget, while in 2018 it got Rs 1.48 lakh crore capex.

Recently, Indian Railways has significantly increased its annual capital expenditure from Rs 40,000-50,000 crore a decade ago to Rs 1.3 trillion in 2018-19. The 2019-20 budget for the railways stands at Rs 1.59 trillion with the government undertaking projects such as bullet train, dedicated freight corridors, among others.

Budgetary allocation for the railways will also increase this year to over Rs 70,000 crore as compared to over Rs 65,837 crore in the previous year. In the 2018-19 budget, the outlay for the railways stood at Rs 1.48 lakh crore, while the budget allocation was Rs 55,088 crore.

According to a report by ratings agency Crisil, online rail bookings are expected to grow at approximately 8 percent CAGR to reach around 425-435 million in FY24.

India has also become the first country in the world to completely electrify its railways and is building the first high-speed, bullet train between Ahmedabad and Mumbai.

Among other reforms, railway minister Piyush Goyal earlier announced the downsizing of Railway Board from eight to five members, including the chairman, and members for operation, business development, infrastructure and finance.

Going ahead, with Sitharaman unveiling Rs 102 lakh crore of infrastructure projects for the next five years — railways could be a significant beneficiary of the move — the railways are expected to remain in focus.

First Published:Jan 30, 2020 1:29 PM IST