Railway stocks are expected to be in focus following Finance Minister Nirmala Sitharaman's review of the capital expenditure (capex) plan for the Ministry of Railways. In a meeting held in New Delhi, Sitharaman urged the ministry to accelerate the conversion of 40,000 regular rail bogies to Vande Bharat standards, a move that was initially announced in the Interim Budget for 2024-25.

The Finance Minister emphasised the need for the ministry to meet the capex target for the fiscal year 2024-25 within a set timeframe, building on the progress made in the first 100 days of the Modi government. She also called for the expedited implementation of the Kavach system, a train collision avoidance system, in a phased manner. Ministry officials reported that Kavach-related work is currently underway on over 3,000 route kilometres on the Delhi-Howrah and Delhi-Mumbai sections.

In line with the government’s push to enhance logistics efficiency and reduce rail movement costs, the Budget for 2024-25 included provisions for three Economic Railway Corridors under the PM Gati Shakti initiative. These corridors will facilitate multi-modal connectivity, including energy, mineral, and cement corridors, port connectivity, and high-traffic density corridors. Ministry officials informed Sitharaman that 434 railway projects, spanning 40,900 kilometers, have been identified under these corridors with a total investment plan of Rs 11.16 trillion. So far, 55 projects, covering 5,723 kilometers and valued at Rs 1.03 trillion, have been sanctioned. During the current year, 101 projects are set to be appraised under this corridor program.

Sitharaman also highlighted the importance of enhancing the ‘ease of living’ for citizens through the doubling and electrification of existing railway tracks, as well as the construction of new lines in line with the Budget's capital expenditure. The capital allocation for the railways stands at Rs 2.55 trillion for FY25, compared to the revised estimate of Rs 2.4 trillion for FY24. A significant portion, totalling Rs 1.3 trillion, is earmarked for rolling stock, new lines, doubling and track renewals, and electrification.

These developments are seen as positive for companies involved in railway infrastructure and rolling stock manufacturing, including KEC International Ltd, Larsen & Toubro (L&T), Siemens Ltd, RVNL Ltd, RITES Ltd, KPIL, IRCON International Ltd, BEML Ltd, Titagarh Rail, Texmaco, and other engineering, procurement, and construction (EPC) firms.

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(Business Today)