Shares of PSU railway firms Rail Vikas Nigam Limited (RVNL), Indian Railway Finance Corporation (IRFC), and Ircon International surged during Monday’s trading session, with RVNL leading the pack, jumping 9.30% to Rs 566.35 on the Bombay Stock Exchange (BSE).
IRFC and Ircon International also posted gains, rising 2.92% and nearly 3% to Rs 185.05 and Rs 272.50, respectively.
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Other railway stocks like Jupiter Wagons and IRCTC also gained during the trading session, which is turning out to be a good one for investors in these stocks.
The strong rally comes after the Cabinet Committee of Economic Affairs’ recent approval of new railway projects worth Rs 24,657 crore, which are expected to boost logistical efficiency, connect previously unlinked areas, and enhance transportation networks.
These projects are slated for completion by FY 2030-31 and have reignited investor confidence in railway stocks, which have been on a losing streak in recent sessions.
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Despite the recent upturn, stock market experts have advised retail investors to trade with caution.
What should retail investors do?
Several analysts, including Seema Srivastava, a Research Analyst at SMC Global Securities, recommended buying railway-focused stocks like RVNL on dips.
Srivastava advises accumulating shares on every 5-7% dip from current levels, as she expects a strong recovery for the company.
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However, investors should also be aware of the ongoing volatility in the domestic stock markets and concerns over potential overvaluation.
While the government’s focus on infrastructure development bodes well for the long-term prospects of these stocks, it’s wise to wait until the prices stabilise before making any significant investments.
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Simply put, while the surge in railway stocks presents an opportunity, it’s crucial to adopt a buy-on-dips strategy and focus on long-term gains rather than short-term profits.
