Shares of Rail Vikas Nigam Ltd, and Indian Railway Finance Corporation Ltd (IRFC) hit a new 52-week high today as Budget 2023 nears. Analysts are foreseeing strong allocation in the budget for the railway sector backed by PSU companies followed by robust Q2FY23 earnings and order books.
Analysts claim that the excellent valuations of these PSUs have attracted interest from investors. They also believe that the railway stock prices have been rising since couple of week and that this trend will continue leading up to the February budget.
On the technical front, analyst, Amit Trivedi, market analyst, assistant vice president - technical and derivatives research at Yes Securities said that Rail Vikas Nigam has doubled in a month, and such kind of action is very rare. Hence, for near term avoid, and for long term hold on to the stock.
Further, he said that the trend for IRFC has been more or less similar, and the stock has been up 50% this month. Since, it was listed last year its difficult to comment.
On the other side, Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One said that they don't have any views on both the stock, but the trend is positive.
"Rail Vikas Nigam has already moved from 40 to 80 level in this month, whereas IRFC has moved from 23 to 34 level. The stock has already rallied vertically in this month, where Rail Vikas Nigam has gained more than 100%, and IRFC by around 50%, in such scenario definitley the momentum is on positive side but risk reward is not in favour at current levels, hence technical view is not possible," he said.
In 2022, so far IRFC has gained 56%, and Rail Vikas Nigam has gained 142%. The weekly average delivery volume of Rail Vikas Nigam is 20.46%, and IRFC is 23.61%.
IRFC reported its July-September earnings with a 14% on-year rise in its net profit to 1,714 crore rupees, while Rail Vikas Nigam for the September quarter reported a 36.52 % on-year jump in its net profit to 381.22 crore rupees.
As far as Rail Vikas Nigam's order book is concerned, Rajesh Prasad, Director (Operations) in Q2FY23 conference call said that the orders at the end of FY22-23 after having the turnover the order book will remain same around 55,000 crores rupees plus.
Further, if they receive orders from Kazakhstan then it will become much more. The target of the company is to have 1 lakh crores of orders all the time.
Today, shares of Rail Vikas Nigam were trading at 80.30 rupees per share, up 10%, and IRFC were trading at 33.80 rupees per share, up 6.1%
According to Mintgenie poll, three analysts recommend 'strong buy' for Rail Vikas Nigam.
