Investors interest in defence and railway stocks grew sharply after tensions between India and Pakistan increased. As many investors look at defense companies as safer bets during uncertain times. As a result, defense stocks are now back in action.
Even the railway stocks have started rising. As companies such as RailTel, RITES, Ircon International, RVNL, IRCTC, BEML, and IRFC have provided a return of as high as 30% in just one month.
These gains were helped by steady order wins and good performance in the March quarter. For example, RailTel’s stock rose from Rs. 312 to Rs. 384 in May — a 30% increase. This was its best monthly gain since January. The company also reported a profit of Rs. 113.4 crore in the March quarter, up from Rs. 77.53 crore last year. The company also confirmed that it expects to grow profit and revenue by 25–30% in the next financial year.
RITES, another government-owned company, also had a strong month. Its stock price jumped 27% in May. The company won over 150 contracts in the fourth quarter, worth more than Rs. 1,418 crore. Its total order book reached an all-time high of Rs. 8,877 crore by the end of March. RITES reported a 6.2% increase in net profit for the quarter, earning Rs. 141 crore.
Ircon International gained 23% in May. The company won multiple new contracts, including a Rs. 1.87 billion order from Kerala State IT Infrastructure. It also received a Rs. 458 crore civil works order for a hydro project in Arunachal Pradesh. Earlier, one of its older contracts was increased by nearly Rs. 59 crore.
Rail Vikas Nigam (RVNL) also attracted investor interest. The stock gained 17% in May after a series of order wins. On Friday, it secured a Rs. 116 crore contract from Central Railway. It was also the lowest bidder for a Rs. 143 crore job from Southern Railway in mid-April.
Meanwhile, IRFC shares rose 12% in May. On May 15, the company got government approval to raise Rs. 100 billion through deep-discount bonds. This is a popular way for government firms to raise money without paying high interest rates. In April, IRFC also became the lowest bidder to give a Rs. 50 billion loan to NTPC. For the March quarter, it posted a profit of Rs. 1,682 crore.
Other railway-related stocks also saw gains. BEML rose 16%, while IRCTC added 8% during the month. Many of these companies are benefiting from government support and a steady flow of contracts. Investors are now hoping that the upcoming quarters will continue this trend of growth.
Just a few months ago, things looked different. From May 2023 to July 2024, railway stocks had gone up a lot. Prices reached very high levels, and some investors felt they were too expensive. When new orders slowed down, the stocks fell sharply. But now, as new contracts come in, investors are feeling more confident again.
The rally in railway and defence stocks shows how quickly market trends can change. When companies perform well and win orders, their stocks tend to attract attention. Defence stocks, in particular, often gain when geopolitical risks rise. And railway companies benefit from large government spending on infrastructure.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of The Buzz Vibes or anyone associated with it. We advise investors to check with certified experts before taking any investment decisions.
