Significant decline in railway PSU shares; RVNL and IRCTC have suffered the most

Significant decline in railway PSU shares; RVNL and IRCTC have suffered the most

On February 12, the BSE PSU index, which had increased by more than 12% year-to-date, finished 4% down at 17,568.

Over the last year, railway shares have increased in value, but not all investors have jumped on board.

On February 12, PSU equities witnessed significant drops in every category, including the railway sector, with the majority of PSU railway stocks trading below their yearly highs. On February 12, the BSE PSU index, which had increased by more than 12% year-to-date, finished 4% down at 17,568.

Following the CAG's warning, Indian Railways commissions four track monitoring devices.

A number of factors have put pressure on the sector, including lower-than-expected results and a sluggish response from the market after the interim budget was announced on February 1. The budget included a 5% increase in railway capital expenditures.

The share price of RVNL, which released its Q3FY24 results on February 8, dropped by 11% to end at Rs 230 on February 12. Since January 31, the stock's year-to-date high, it has dropped by 25.39 percent. RVNL's net profit decreased 6.2% year over year in Q3FY24 to Rs 358.6 crore, while revenue decreased 6.4% to Rs 4,689.3 crore during the same time.

IRCON's stock dropped 11.49 percent as well, ending the day at Rs 196.80. Since reaching its yearly peak on January 20, the stock has dropped by 20%. IRCON reported a 29% year-over-year increase in net profit to Rs 244 crore for Q3FY24.

RailTel closed at Rs 363 on February 1 after falling 8.8%. Since hitting its year-high on January 25, the stock has decreased 17.3 percent. In Q3FY24, revenue climbed by 47% year over year to Rs 674.81 crore, while net profit improved to Rs 62.14 crore from Rs 31.95 crore. Crore throughout the previous fiscal year.

Anticipating the release of its third-quarter earnings on February 12, IRCTC saw a decline of 8.42% from Rs 983.80 on January 19. On February 12, the shares closed at Rs 901 after falling 4%.

Although the value of railway shares has increased over the last year, not all investors have jumped on board. Veteran investor Madhusudan Kela recently told Moneycontrol that, while he thought there was potential in certain PSU equities, he was not as enthusiastic about railway stocks. He said, "I am not comfortable investing in railway stocks at these current levels."