Experts caution that the rally in these stocks may fizzle out soon, as the overall market sentiment still remains weak.
Railway-related stocks have underperformed the market so far in 2016, with counters such as Hind Rectifiers, Kernex Microsystems, Stone India, and Titagarh Wagons skidding 16-22 per cent. By comparison, benchmark indices - the S&P BSE Sensex and the Nifty 50 - have lost 10 per cent each during this period.
Analysts say the railway budget on Friday assumes significance.
It will be looked at for its potential to rejig the investment cycle and bring transformative change to transportation in India.
“In our talks with companies, most, including Concor, Gateway Distriparks, and Allcargo Logistics, are expecting the finance minister to announce measures for speedy implementation of the dedicated freight corridor, speedy implementation of the ongoing infrastructure projects, and faster rollout of the goods and services tax, which would help the industry to re-align infrastructure and improve it cost structure,” points out a Kotak Securities note.
Recently, the government approved Rs 11,000 crore worth of capacity increase in the railways through construction of infrastructure for growth in passenger and freight traffic.
Though analysts expect the passenger fares to remain unchanged, rollout and expansion of high speed network, building of 200-kmph train coaches indigenously, upgradation of station complexes for comprehensive government services, skill development and implementation of new design coaches and vacuum toilets are some of the other expectations from the Railway Budget 2016, according to reports.
Given the underperformance of railway-related stocks, should you invest in these stocks ahead of the railway budget?
No comments:
Post a Comment