Railway PSU stocks in a free fall; IRCTC, RVNL biggest losers

PSU stocks on February 12 saw major declines across segments including the railway segment with most PSU railway stocks trading down from the year's high. The BSE PSU Index, which had gained over 12 percent YTD, fell 4 percent on February 12, closing at 17,568.

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The segment has been under pressure due to a variety of reasons including below estimate earnings as well as a muted market response post the February 1 Interim Budget. Railway capex was increased by 5 percent in the budget.

At close on February 12, RVNL, which reported its Q3FY24 results on February 8, saw its share price fall 11 percent to close at Rs 230. The stock has fallen 25.39 percent since the year's high on January 31. In Q3FY24, net profit for RVNL declined 6.2 percent year-on-year (YoY) to Rs 358.6 crore and revenue for the same period fell 6.4 per cent to Rs 4,689.3 crore.

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Stocks for IRCON also fell 11.49 percent and closed at Rs 196.80. The stock has fallen 20 percent since the year's high on January 20. For Q3FY24, IRCON reported a 29 percent YoY increase in net profit to Rs 244 crore.

Railtel fell 8.8 percent and closed at Rs 363 on February 1. The stock has fallen 17.3 percent since the year's high on January 25.  Revenue for Q3FY24 grew 47 percent YoY to Rs 674.81 crore while net profit grew to Rs 62.14 crore compared to Rs 31.95 crore in the previous fiscal.

IRCTC which is expected to announce its Q3 results on February 12 fell 8.42 percent from Rs 983.80 on January 19. On February 12, the stock fell 4 percent to close at Rs 901.

Railway stocks have been on a rally over the last year but not all investors have been onboard. In a recent conversation with Moneycontrol, veteran investor Madhusudhan Kela said that while he found value in some PSU stocks he was not so bullish on railway stocks. “At the current levels, I am not comfortable investing in railway stocks,” he said.

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