Top Railway stocks of India in 2022

Indian Railway stocks

There are very few railway stocks listed in India. But still, the demand for railway stocks never seem to subside. No matter what happens in the stock markets, retail investors are always looking for the best railway stocks to buy in India. Let’s take the most recent example of Indian Railway Catering and Tourism Corporation Ltd. (IRCTC). The stock made its market debut on 14th October 2019 at Rs. 644 against its issue price of Rs. 320 per share. Since then, the stock has rallied to touch an all-time high of Rs. 6,393 (adjusted for stock split) on 19th October 2021. That is an upside of 893% (on an absolute basis) in just two years.

Now, what is the secret behind the rally of railway stocks? And which are the railway stocks listed on the Indian Stocks Exchanges? Let’s find out in this article.

In this article on railway stocks you will learn:

Everything About the Railway Sector
List of Railway Stocks
Why are railway stocks in demand?
Top Railway Stocks listed on the Indian Stock Exchanges
1. Indian Railway Catering Tourism Corporation Ltd. (IRCTC)
2. Bharat Earth Movers Limited
3. Titagarh Wagons Limited
4. Container Corporation of India Limited (CONCOR)
5. Indian Railway Finance Corporation Ltd.
6. Bharat Electronics Limited
7. Rail Vikas Nigam Ltd
8. Ircon International

Everything About the Railway Sector

The inception of railways took place when the Governor-General of India, Lord Hardinge, allowed private companies to set up railway routes in 1844. Under this act, the East India company started setting up railway routes. This railway route was designed to transport construction material to Roorkee, a small city in Haridwar. Later the first steam passenger train was inaugurated which would travel from Bombay to Thane covering a distance of 32 km and this gave birth to Indian Railways.

Nowadays, we all travel long distances by trains as they are not only comfortable but also more affordable than other modes of transports.

Today, the Indian Railway is the fourth largest railway system and freight carrier in the world. It covers a distance of 67,956 km and has 7,335 stations across India. In the fiscal year 2021, the freight loadings increased by 18% as compared to the last year and total revenues generated by freight transport was a whopping $16 billion. So, it’s safe to assume that no matter what happens in the market, railway is going to exist forever and most certainly remain a growing industry.

List of Railway Stocks Listed on the Indian Stock Exchanges as of 2022

Name Current market price 52 week High 52 week Low Market Capitalisation (in crores)
Indian Railway Catering and Tourism Corporation Rs. 787 Rs. 1,279.26 Rs.310 Rs. 62,932 
Bharat Electronics Limited Rs. 240 Rs. 228 Rs. 115.85 Rs.  58,430
Container Corporation of India Limited Rs. 689 Rs. 754.4 Rs. 527.9 Rs. 41,962 
Indian Railway Finance Corporation Rs. 22.2 Rs. 26.04 Rs. 20.8 Rs. 29,077 Cr.
Rail Vikas Nigam Ltd Rs. 34.2 Rs. 44.8 Rs. 26.35 Rs. 7,141
Bharat Earth Movers Limited Rs.  1,824 Rs. 2,085 Rs. 1,119 Rs. 7,593
Ircon International Rs. 42.6 Rs. 54 Rs. 39.1 Rs. 4,007
Texmaco Rail and Engineering Ltd Rs. 44.5 Rs. 49.9 Rs. 21.8 Rs. 1,432
Titagarh Wagons Rs. 105 Rs. 124 Rs. 44.3 Rs.  1,256
Texmaco Rail & Engineering Ltd Rs. 44.5 Rs. 49.9 Rs. 21.8 Rs. 1,432
Commercial Engineers & Body Builders Co Limited Rs. 49.5 Rs. 59.35 Rs. 14.55 Rs. 443
ARSS Infrastructure Projects Ltd Rs. 27.9 Rs. 52.1 Rs. 21.4 Rs. 63.4

*Data as on 12th April 2022

At the beginning of the article we had taken an example of the bullish rally of IRCTC. Let’s find out why is there a demand for railway stocks in the Indian stock markets?

Why are railway stocks in demand?

To find the answer to this question, we need to go back to the learnings of Mr Warren Buffett. In one of his interviews, he had confessed his lifelong love for railroads. In 2009, Warren Buffett’s Berkshire Hathaway bought shares of one of the largest rail transport companies in the world—Burlington Northern Santa Fe.

In the interview, he had mentioned that railway stocks are always in trend and that is because of these two reasons.

1. Very low operating cost

Railways are seen as a forever cash-rich business as they don’t need to generate huge revenues to be profitable. This is because the inventory they use just needs a bit of maintenance and they have a low operating cost.

Moreover, during a recession, the freight charges of waterways or airways might still be costlier than a train. Because of these reasons, the railway sector can easily survive amidst an economic downturn.

If we take an example, during the Covid 19 pandemic the freight loading increased by 18% which proves that during economic downturns railway freights are still a preferable mode of transport.

2. Entry barrier

In India, railways have a monopoly. It is nearly impossible for a new competitor to enter into the markets. That’s because laying tracks and building such a wide network would need a huge investment. Moreover, as railways have no other competitor, they also have the pricing power in their hands. So even if they charge a higher price for their services, you have limited options to switch.

Now, let’s quickly take a look at five well-known railway stocks listed on the Indian Stock Exchanges.

Top Railway Stocks listed on the Indian Stock Exchanges

1. Indian Railway Catering Tourism Corporation Ltd. (IRCTC)

IRCTC is a Mini Ratna for the Government of India. It is a major and extended arm of railways. It was incorporated on 27th September 1999 to upgrade, professionalize and manage railway services provided to travellers.

As on 10th March 2022, the market capitalisation of IRCTC is Rs. 61,120 crores and is one of the renowned companies in the railway sector.

Here are the four core initiatives taken up by IRCTC.

  • Catering and Hospitality
  • Internet Ticketing
  • Travel and Tourism
  • Packaged Drinking Water (Rail Neer)

The company is debt-free and has offered a good return on equity of 26.75% over the last three years (as on 10th March 2022). Moreover, the stock is also maintaining a healthy dividend pay-out of 59.70%.

Quick overview of IRCTC

Market Cap (Cr): Rs. 61,504 Cr. Face Value: Rs. 2 EPS: Rs. 6.92
Book Value: Rs. 20.4 Roce (%): 16.5 Debt to Equity: 0.07
Stock PE: 111 ROE (%): 11.6 Dividend Yield (%): 0.26
 Promoter’s Holdings (%): 67.4 Total Debt (Cr): Rs. 108

*Data as on 16th March 2022

2. Bharat Earth Movers Limited

BEML is a Public Sector Undertaking (PSU) company that manufactures a variety of heavy equipment, such as machines used for earthmoving, transportation and mining, etc. It is the second-largest manufacturer of earthmoving equipment in Asia and it controls 70% of India’s market in that sector. Apart from this, the company also manufactures rail coaches for sub-urban trains.

Quick overview of BEML

Market Cap (Cr): Rs. 6,395 Face Value: Rs. 10 EPS: Rs. 36.7
Book Value: Rs. 509 Roce (%): 4.55 Debt to Equity: 0.35
Stock PE: 41.8 ROE (%): 3.08 Dividend Yield (%): 0.40
Total Debt (Cr): Rs. 728 Promoter’s Holdings (%): 54.03

*Data as on 16th March 2022

3. Titagarh Wagons Limited

Titagarh Wagons Limited (TWL) came into existence in 1997 and it is the second-largest freight wagon manufacturer in India. The company manufactures freight wagons, passenger coaches, metro train coaches, train electricals and a lot more and generates 35% revenue from this segment.

The company has the capacity to manufacture 8,400 wagons, 200 metro coaches and 36 electric multiple unit coaches, and process around 30,000 tonnes of casting steel, per annum.

Quick overview of TWL

Market Cap (Cr): Rs. 1,127 Face Value: Rs. 2 EPS: Rs. 2.12
Book Value: Rs. 72.5 Roce (%): 4.71 Debt to Equity: 1.00
Stock PE: 44.4 ROE (%): -1.78 Dividend Yield (%): 0
Total Debt (Cr): Rs. 868 Promoter’s Holdings (%): 47.0

*Data as on 16th March 2022

4. Container Corporation of India Limited. (CONCOR)

CONCOR is a navratna company incorporated in March 1988. It is also an autonomous Public Sector Undertaking (PSU) company under the Ministry of Railways. The company’s objective is to serve as a catalyst for promoting the use of containers in the freight process and give a boost to India’s international trade.

Quick overview of CONCOR

Market Cap (Cr): Rs. 36,518 Face Value: Rs. 5 EPS: Rs. 13.5
Book Value: Rs. 176 Roce (%): 7.75 Debt to Equity: 0.07
Stock PE: 42.2 ROE (%): 4.99 Dividend Yield (%): 1.01
Total Debt (Cr): Rs. 721 Promoter’s Holdings (%): 54.8

*Data as on 16th March 2022

5. Indian Railway Finance Corporation Ltd

Indian Railway Finance Corporation (IRFC) was set up on 12th December, 1986 as the dedicated financing arm of the Indian Railways. The objective of this company is to mobilise funds for railways from domestic as well as overseas markets. The company has funded various railway projects. Moreover, they have also been lending funds to various entities in the railway sector such as Rail Vikas Nigam Limited (RVNL), Railtel, Konkan Railway Corporation Limited (KRCL), Pipavav Railway Corporation Limited (PRCL) etc.

Quick overview of IRFC

Market Cap (Cr): Rs. 29,208 Face Value: Rs. 10 EPS (₹):  4.65
Book Value: Rs. 30.2 Roce (%): 5.02 Debt to Equity: 5.02
Stock PE: 4.80 ROE (%): 13.3 Dividend Yield (%): 4.87
Promoter’s Holdings (%):  86.36 Total Debt (Cr): Rs. 1,98,502

*Data as on 16th March 2022

6. Bharat Electronics Limited

BEL is an Indian state-owned aerospace and defence company. It has about nine factories in India. It spends 7.5% of turnover on research and Development which makes it one of the highest amongst defence Public Sector Undertaking (PSU) companies. It is also a debt free company.

Quick overview of Bharat Electronics Limited

Market Cap (Cr): Rs. 50,937 Face Value: Rs. 1 EPS (₹): 10.7
Book Value: Rs. 47.1 Roce (%):27.9 Debt to Equity: 0
Stock PE:  19.5 ROE (%):19.9 Dividend Yield (%):1.93
Promoter’s Holdings (%):  51.14 Total Debt (Cr): 0

*Data as on 16th March 2022

7. Rail Vikas Nigam Ltd

Rail Vikas Nigam is engaged in the business of implementing various types of Rail infrastructure projects such as adding new rail lines, railway electrification, major bridges and other workshops. These projects are offered by the Ministry of Railways (MOR).

Quick overview of Rail Vikas Nigam Ltd.

Market Cap (Cr): Rs. 6,912 Face Value: Rs. 10 EPS (₹):5.36
Book Value: Rs. 29.2 Roce (%): 11.3 Debt to Equity: 1.02
Stock PE:  6.11 ROE (%):11.3 Dividend Yield (%): 4.78
Promoter’s Holdings (%): 78.2 Total Debt (Cr): 0

*Data as on 16th March 2022

8. Ircon International

Ircon International Limited was incorporated in 1976 as a railway construction company. As time passed, it diversified progressively since 1985 as an integrated engineering and construction public sector undertaking company specializing in large and technologically complex infrastructure projects in various sectors such as railways, highways, etc.

Quick overview of Ircon International

Market Cap (Cr): Rs. 4,016 Cr. Face Value: Rs. 2 EPS (₹): 5.54
Book Value: Rs. 48.6 Roce (%): 13.4 % Debt to Equity: 0.21
Stock PE:  7.73 ROE (%): 9.03 % Dividend Yield (%): 5.53 %
Promoter’s Holdings (%): 73.18 Total Debt (Cr): 943 Cr

*Data as on 12th April 2022

Bottom line

With this we come to the end of the article on the top railway stocks listed on the Indian stock exchanges. From the points we had covered earlier, there’s no doubt railway stocks are forever going to be in demand as it is a monopoly business.

To know which are the best railway stocks to buy, all you need to do is visit Samco’s star ratings page and check the ratings for railway stock. This rating is revised daily and is calculated using more than twenty million data points. It also mentions the ratios and pros and cons of investing in the company. So, researching stocks just got simpler.

To invest in any of the railway stock, open a Demat account with Samco.

Happy Investing 

Share this article

About The Author

Leave A Comment?