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Shares of state-owned Rail Vikas Nigam Ltd. (RVNL) have declined close to 20 percent from their 52-week high. The stock hit its highest level in 12 months of Rs 84.10 on November 29 this year. The stock doubled in just under a month. It traded at Rs 40 on October 30.

Despite the recent correction, the stock has gained over 133 percent in the last six months.

Market experts were expecting some consolidation in railway stocks like RVNL, RailTel, and Ircon International after the sharp spike they witnessed in recent months.

Solid buying was seen in railway stocks last month as investors anticipated that Finance Minister Nirmala Sitharaman may announce some major railway infrastructure projects in the Union Budget 2023.

Nirav Karkera of online brokerage firm Fisdom was quoted as saying that most of the railway stocks are seeing a boom due to the possibilities of announcements in the budget. “With the increase in Capex, the order book of companies related to railways will increase and their income will also increase,” he had said.

According to reports, the Central government is also planning on increasing the number of trains. This, coupled with the government’s focus on the road-rail freight mix, had fuelled the rally in railway stocks.

Railway stocks were on a tear in the month of November after market veterans like Ramesh Damani highlighted them as some of their preferred bets for the new Samvat.

The RVNL stock is trading at Rs 70.50, down 3.16 percent.

Also Read: Six reasons behind the surge in railway stocks and can investors still profit from them?

(Edited by : Rukmani Krishna)

First Published:Dec 16, 2022 12:23 PM IST