Best Indian Railway Stocks in India 2024

Best Railway Shares in India (as per Market Capitalization)

Given below is the list of the top railway sector stocks as per market capitalization.

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-

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-

• 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.

• 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. 

• 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. 

• 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.

• 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.