Best Indian Railway Stocks in India 2024
(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)
Railways Industry in India is one of the largest ones in the world. For over 170+ years, the sector has been catering to millions of passengers every single day. From daily commutes to freight transfers, the widespread network of railways has been contributing significantly to the Indian economy’s growth.
Railway Industry in India - A Quick Glimpse
India's railway network has a long history. It dates back to the British colonial era, wherein the first passenger train ran from Mumbai to Thane in 1853. Since this period, the Indian Railways has grown exponentially. It is a state-owned enterprise comprising millions of miles of tracks, numerous stations, and a vast fleet of trains.
Railways in India operate passenger services, suburban trains, and luxury trains, too, connecting remote villages to major cities. Apart from passenger services, this sector plays a key role in transporting freight across the country.
Despite the growth and significance of the railway sector, often this industry has faced numerous challenges, that include funding constraints, safety concerns, ageing infrastructure, etc. However, the future looks promising for this sector, given the ambitious plans to create high-speed rail corridors, expansion of Vande Bharat Express network, modernization of existing infrastructure, enhancing passenger amenities, etc.
Due to these factors, many investors have been turning to this sector for investment. Nevertheless, it is better to stay updated with factors such as the latest developments, financial health, growth prospects, etc, before investing in railway stocks in India.
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Best Railway Shares in India (as per Market Capitalization)
Given below is the list of the top railway sector stocks as per market capitalization.
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Best Railway Stocks in India (as per Market Capitalization) |
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*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog. |
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Best Railway Stocks in India 2024 as per Analyst Ratings
We have listed here the top railway stocks in 2024 as per the BUY analyst ratings provided by the I/B/E/S database. These stocks have been listed based on ratings provided by the analysts.
The below-mentioned are the top railway stocks as per the BUY analyst ratings-
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Best Railway Stocks in India (as per analyst ratings) |
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100 |
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60 |
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*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog. |
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Overview of Top Railway Stocks in India
Given below is the overview of the best railway sector stocks as per analyst ratings and market capitalisation-
1) Indian Railway Finance Corp Ltd.
Indian Railway Finance Corp Ltd, popularly known as IRFC, was founded in 1986. It is the robust financial arm of the Indian railways that primarily operates through the finance and leasing segment.
The company follows a leasing approach to fund Indian Railways. It mainly borrows funds from the financial markets to finance the creation or acquisition of assets, which are then leased to the railways for further development.
2) IRCTC Ltd.
Indian Railway Catering and Tourism Corporation Limited was established in 1999. It is vastly involved in providing railway tickets, catering services to railways, and also, packaged drinking water at railway stations/trains.
It offers an extensive range of services catering to all the various needs of a traveller. Some of the prevalent services include mobile catering, bottled drinking water, retiring rooms, dormitories, executive lounges, and many more.
3) Rail Vikas Nigam Ltd.
Rail Vikas Nigam Limited, or RVNL, is completely involved in the development of rail infrastructure. Its main business includes infrastructure related to new lines, bridges, workshops, production units, electrification, etc.
From government ministries to PSUs, RVNL has a vast network of clients. It is an important entity responsible for executing all kinds of railway projects, railway electrification, metro projects, construction of cable-stayed bridges and a lot more.
4) Container Corporation of India Ltd.
Container Corporation of India Ltd. (CONCOR) is engaged in logistics and transportation services. Its 2 primary segments include EXIM and Domestic, which are involved in operation, transportation and warehousing.
It was founded in 1988 and since then has been playing a pivotal role in the transportation and handling of containers across railways, roadways, airways, etc.
5) Ircon International Ltd.
Ircon International Ltd. is an integrated engineering and construction company incorporated by the Ministry of Railways in 1976. It is engaged in the infrastructure associated with railways, tunnels, railway electrification, metros, highways, bridges, etc.
It has completed over 390+ domestic and 120+ international projects in approximately 25 countries. It has served in countries such as Nepal, Malaysia, Sri Lanka, Bangladesh, etc.
6) Titagarh Railsystems Ltd
Titagarh Rail Systems Limited was formerly called Titagarh Wagons Limited. It was established in 1997 with the sole objective of supplying passenger rolling stock, including metro coaches.
It operates through 4 business divisions, namely, Railway Freight, Railway Transit, Engineering, and Shipbuilding. Apart from this, it also designs and manufactures wagons such as container flats, cement wagons, clinker wagons, tank wagons, etc.
7) RITES Ltd
RITES Limited was founded in 1974. It is a Navratna and Schedule 'A' Central Public Sector Enterprise. It is an engineering and consultancy company involved in leasing and exporting railway rolling stock, construction of turnkey projects, wet leasing of locomotives, quality assurance, and more.
It is primarily active in sectors such as metros, railways, ropeways, urban engineering, airports, green mobility, inland waterways, etc.
Factors to Consider Before Investing in Railway Stocks in India
You might often get tempted to invest in Indian railway stocks, but before investing, it is necessary you consider the factors mentioned below-
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Government Policies and Regulations
Since the Indian railways is a state-owned enterprise, it is significantly influenced by the policies and regulations stipulated by the government. Therefore, make sure you stay updated with the infrastructure developments, tariffs, privatisation, budget allocation, etc.
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Financial Performance
Before investing any sum in railway stocks, it is necessary to evaluate the financial performance of railway companies. Run a thorough check around the revenue growth, debt levels, profitability, etc, to understand the track record of companies.
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Technological Advancements
To understand the growth potential of the railway industry, make sure to monitor the technological advancements in the sector. Since growth potential indicates healthy balance sheets, therefore, keep an eye on innovation, automation, digitalization, and electrification in the industry.
Embracing such technologies helps improve safety, efficiency, and cost-efficiency, directly impacting growth. The utilisation of such tech-backed factors signifies that the railway industry is stepping up the growth ladder.
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Risk Factors
The Indian Railway industry is highly prone to regulatory risks, operational risks, geopolitical risks, etc. Therefore, you should conduct a thorough risk assessment to overcome possible setbacks.
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Demand Trends
The Indian railway sector is largely dependent on passenger and freight transportation. Therefore, you should check factors such as population growth, industrial activities, trade volumes, etc, to assess the demand for services offered by railways.
Should You Invest in Railway Stocks?
The railway industry has always been a popular choice for investment. Given its scale, government support, consistent growth, technological advancements, and diverse services, it has been evolving since its inception. These lucrative factors have often attracted investment from people around the country.
However, you must not forget that this sector is also often influenced by stringent government regulations, geopolitical factors, labour disputes, etc. This has frequently affected its market performance as a whole.
Thus, you should weigh all the possible factors before investing any sum in railway related stocks, along with considering your investment horizon.
The Bottomline
If you had to name one Indian sector to bet on, many of you would certainly say Railways, right? But why? Probably because of its progressive nature, consistent growth, widespread network and promising future.
Though there are several positive investment indicators in the Railway sector, there are some inimical ones too. Hence, it is your responsibility to do a complete analysis of a railway company before you invest in it. Be it profitability, demand, growth, risks, or your investment appetite, ensure that you do an all-round analysis.
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*Stock Selection Criteria for Top Stocks Based on Analyst Rating Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings- These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance. |
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*Stock Selection Criteria for Top Stocks Based on Market Capitalisation These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). |
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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory. To read the RA disclaimer, please click here |