Dear friends, India’s railway sector is expanding rapidly. The Indian government is actively promoting the railway sector and allocating significant funds to it in the annual budget. As a result, many investors are on the lookout for promising railway stocks.
In this post titled “Best Railway Stocks in India for Long Term Investment,” we have identified some railway stocks that are experiencing strong growth.
If the railway sector continues to grow at this pace, these shares have the potential to offer substantial returns in the future. Before investing in any of these shares, it is essential to conduct a thorough fundamental analysis.
Explore the best railway stocks in India for long-term investment. Check out top-performing companies like Indian Railway Finance Corp, IRCON, Rail Vikas Nigam, and more. Discover their fundamentals and growth potential to make informed investment decisions.
Introduction
The Indian railway sector is experiencing rapid growth, and the government continues to emphasize its importance in the annual budget. With this increasing focus, many investors are actively seeking out railway stocks that promise good returns.
In this post, we have compiled a list of the best railway stocks in India for long-term investments. These stocks have shown promising growth, and if the railway sector continues its upward trajectory, they could potentially yield significant profits in the future.
However, always remember to conduct thorough fundamental analysis before making any investment decisions.
Best Railway Stocks in India for Long Term
Here’s a curated list of some of the top-performing railway stocks in India. Along with the stock information, we have provided a brief overview of the companies to aid you in your analysis.
1. Indian Railway Finance Corporation Limited (IRFC)
- Establishment: 12 December 1986
- Headquarters: New Delhi
- Revenue: ₹13,823.45 Crore
Why invest?
Indian Railway Finance Corporation (IRFC) is primarily controlled by the government and acts as a financing arm for the Indian Railways.
It provides loans for rolling stock, bonds, and capital properties. As of now, the stock is trading at ₹162.05 with a market cap of ₹2.12 Lakh Crore.
Key Points:
- 5-year CAGR: 25.3%
- Dividend yield: Good dividend payout
- ROCE: 5.32%, ROE: 14.7%
- PE Ratio: 34.9
Investment Tip:
Despite its strong performance, it’s essential to conduct a fundamental analysis before investing.
2. Ircon International Limited
- Establishment: 27 April 1976
- Headquarters: New Delhi
- Revenue: ₹5,441.72 Crore
Why invest?
Ircon International is a key player in the electrification, signaling, and construction of rail projects across India. Currently trading at ₹220 with a market cap of ₹21.50 Trillion, this company holds great long-term investment potential.
Key Points:
- PE Ratio: 24.3
- Dividend yield: 1.31%
- ROCE: 15.7%, ROE: 15.4%
- 2023 Revenue: ₹2.99 Trillion
Investment Tip:
Research the current fundamentals before investing, especially as the company has seen a slight dip in promoter shareholding.
3. Rail Vikas Nigam Limited (RVNL)
- Establishment: 26 January 2003
- Headquarters: New Delhi
- Revenue: ₹1,938.71 Crore
Why invest?
Rail Vikas Nigam is involved in the development of railway bridges, electrification, and new railway lines. With a market cap of ₹58.74 Trillion and a stock price of ₹257, this company is one of the top railway stocks for long-term growth.
Key Points:
- PE Ratio: 41.79
- Dividend yield: 33%
- ROCE: 17.8%, ROE: 20.8%
- 5-year CAGR: 20.3%
Investment Tip:
Watch out for changes in the company’s fundamentals, such as a drop in promoter shareholding, before deciding to invest.
4. Rites Limited
- Establishment: 26 April 1974
- Headquarters: Gurugram
- Revenue: ₹582.36 Crore
Why invest?
Rites Ltd. is a prominent railway consultancy and transport services provider, with a strong presence in the railway infrastructure and advisory space. Trading at ₹766 with a market cap of ₹19.26 Trillion, it’s an attractive pick for investors.
Key Points:
- PE Ratio: 41.8
- Dividend yield: 2.56%
- ROCE: 29.7%, ROE: 21.3%
- Revenue 2023: ₹582.36 Crore
Investment Tip:
Ensure you review the financial health of the company before investing, as it continues to offer strong returns despite being debt-free.
5. Indian Railway Catering and Tourism Corporation Ltd (IRCTC)
- Establishment: 1999
- Headquarters: New Delhi
- Revenue: ₹995.32 Crore
Why invest?
IRCTC is the go-to platform for railway catering services and online ticket booking, and it has expanded its reach to include other services like tourism. Trading at ₹947 with a market cap of ₹75.62 Trillion, IRCTC is a strong contender for long-term gains.
Key Points:
- PE Ratio: 71.49
- Dividend yield: 0.58%
- ROCE: 59.2%, ROE: 45.4%
- Zero debt
Investment Tip:
Before investing, assess the fundamentals and seek professional advice if necessary.
6. Container Corporation of India Limited (CONCOR)
- Establishment: March 1988
- Headquarters: New Delhi
- Revenue: ₹6,384.96 Crore
Why invest?
Container Corporation of India is the leading provider of containerized freight transportation through railways. The company is trading at ₹950, with a market cap of ₹57.93 Trillion, making it one of the most reliable railway stocks.
Key Points:
- PE Ratio: 47.4
- Dividend yield: 1.16%
- ROCE: 13.7%, ROE: 10.6%
- Revenue growth: 10.5% increase in 2023
Investment Tip:
Conduct due diligence regarding the company’s performance before investing.
7. Titagarh Rail Systems Limited
- Establishment: 1984
- Headquarters: West Bengal
- Revenue: ₹2,822.17 Crore
Why invest?
Titagarh Rail Systems specializes in manufacturing metro trains and railway wagons. With its focus on innovation, the company has seen steady growth. It is currently trading at ₹1,000, with a market cap of ₹13.67 Trillion.
Key Points:
- PE Ratio: 58.19
- Dividend yield: 0.05%
- ROCE: 17.6%, ROE: 13.9%
- 5-year CAGR: 23.6%
Investment Tip:
Research the fundamentals before investing, and keep an eye on company reports.
8. BEML Limited
- Establishment: May 1964
- Headquarters: Bengaluru
- Revenue: ₹2,822.17 Crore
Why invest?
BEML Limited manufactures essential railway equipment, including diesel engines. The stock is trading at ₹3,508 with a market cap of ₹14.65 Trillion. Its strong performance makes it an attractive pick for long-term investors.
Key Points:
- PE Ratio: 80.1
- Dividend yield: 0.28%
- ROCE: 10.5%, ROE: 6.3%
- Recent return on equity: 5.03%
Investment Tip:
Consider BEML’s performance in the last 3 years and analyze its fundamentals before deciding to invest.
Stock Price Summary
- Indian Railway Finance Corp Ltd: ₹162
- Ircon International Ltd: ₹228
- Rail Vikas Nigam Ltd: ₹280
- Rites Ltd: ₹803
- Indian Railway Catering and Tourism Corp Ltd: ₹947
- Container Corporation of India Ltd: ₹950
- Titagarh Rail Systems Ltd: ₹1,018
- BEML Ltd: ₹3,508
FAQs:
- Which are the best railway stocks in India?
- Some of the best railway stocks include IRCTC, Container Corporation of India, Rites Ltd., Rail Vikas Nigam Ltd., and Titagarh Rail Systems Ltd..
Conclusion
In conclusion, these best railway stocks in India show strong growth potential. However, it is vital to carry out thorough fundamental analysis before making investment decisions.
Consult with a financial advisor and review each company’s financial health through annual reports to make an informed choice.
For more insights on investing and stock recommendations, feel free to explore other articles on our website!
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