Best Railway Stocks in December 2024: Jupiter Wagons, Titagarh Rail, RVNL and More – Based on 5-Yr CAGR

The Indian railway system is a vital part of the country’s economy and a key mode of transportation. Covering thousands of kilometres and connecting almost every part of India, it is the fourth-largest railway network globally, after the US, China, and Russia.

The Railways Board manages the entire railway system in India, holding a monopoly over rail services and infrastructure. Railways are a popular choice for long-distance travel due to their affordability and efficiency. By 2050, India is expected to account for 40% of the world’s total rail activity. For FY 2024-2025, the goal is to upgrade 40,000 traditional rail bogies to meet the standards of ‘Vande Bharat’ trains.

In this article, check the best railway sector stocks in December 2024 in India based on their 5-yr CAGR. 

Best Railway Stocks in India in December 2024 – 5yr CAGR Basis

Note: The best railway stocks list provided here is as of December 02, 2024. The stocks are sorted based on the 5Y CAGR. 

Overview of the Best Indian Railways Stocks

• Jupiter Wagons Ltd

Jupiter Wagons is a leading company that makes railway wagons, parts for passenger coaches, and alloy steel castings used in rolling stock and tracks. In September 2024, Jupiter Wagons reported revenue of ₹973.63 million and a net profit of ₹88.62 million, compared to ₹894.93 million in revenue and ₹89.23 million in net profit in June 2024. 

Key metrics:

• Earning per Share (EPS): 8.61
• Return On Equity (ROE): 14.28

• Titagarh Rail Systems Ltd

Titagarh Rail Systems focuses on creating modern transportation solutions, such as semi-high-speed trains, urban metros, passenger coaches, propulsion systems, and various types of wagons, including specialised designs. For September 2024, Titagarh Rail Systems reported a revenue of ₹10,569.50 crore and a net profit of ₹851.20 crore, compared to ₹9,030.50 crore revenue and ₹713.10 crore net profit in June 2024. 

Key metrics:

EPS: 23.38

ROE: 13.27

• Rail Vikas Nigam Ltd

Rail Vikas Nigam Ltd handles various railway infrastructure projects assigned by the Ministry of Railways, such as building new tracks, doubling existing lines, converting gauges, constructing major bridges, and electrifying railways. For September 2024, Rail Vikas Nigam Ltd reported revenue of ₹4,869.22 crore and a net profit of ₹302.51 crore, compared to ₹4,064.27 crore revenue and ₹217.81 crore net profit in June 2024. 

Key metrics:

EPS: 6.14

ROE: 16.10

• Ramkrishna Forgings Ltd

Ramkrishna Forgings Ltd produces high-quality forged, machined, and fabricated products for industries such as railways, agriculture, mining, construction, power, and oil and gas. It reported revenue of ₹952.32 crore in September 2024, compared to ₹868.46 crore in June 2024 and ₹3,489.61 crore for FY23-24. Its net profit stood at ₹182.80 crore in September 2024, up from ₹73.08 crore in June 2024, with a total of ₹326.07 crore for FY23-24.

Key metrics:

EPS: 23.53

ROE: 14.59

• Texmaco Rail & Engineering Ltd

Texmaco Rail & Engineering Ltd, a part of the Adventz Group, is an engineering and infrastructure company. It specialises in manufacturing rolling stock, hydro-mechanical equipment, steel castings, and constructing railway EPC projects, bridges, and other steel structures. For the period ending September 2024, Texmaco Rail & Engineering Ltd reported a revenue of ₹1,116.29 crore, compared to ₹891.65 crore in June 2024. The company’s net profit for September 2024 stood at ₹48.45 crore, an increase from ₹40.25 crore in June 2024. 

Key metrics:

EPS: 4.13

ROE: 6.38

Railways Sector Industry Growth in India

By the end of FY24, Indian Railways generated a total revenue of ₹2.40 lakh crore (around US$28.75 billion). Passenger numbers increased by 520 million, reaching 648 million in FY 2023-24. Freight loading in FY24 surpassed 1,500 MT, slightly below the 1,512 MT in FY23. For 2024-25, the planned capital expenditure for the railways is US$30.33 billion (about ₹2.52 lakh crore). As of January 31, 2024, 41 Vande Bharat trains are operational, connecting states through an electrified Broad Gauge (B.G.) network.

The Indian railway system is growing quickly and is projected to become the 3rd largest railway market in the world within the next 5 years, making up 10% of the global market. Indian Railways is also working towards achieving Net Zero Carbon Emissions by 2030.

Factors to Consider When Investing in Best Railway Stocks in India

Before investing in railway stocks, consider the following factors:

• Government Policies: Indian Railways is state-owned and influenced by government policies on infrastructure, tariffs, and privatisation. Stay updated on these changes.
• Financial Performance: Review railway companies’ financial health, including revenue growth, profitability, and debt levels, to gauge their stability.
• Technological Advancements: Monitor the sector’s innovation, automation, digitalisation, and electrification as these improvements drive growth, safety, and cost-efficiency.
• Risk Factors: Be aware of regulatory, operational, and geopolitical risks that may impact the industry.
• Demand Trends: The railway sector depends on passenger and freight demand, influenced by population growth, industrial activities, and trade.

Conclusion

Railway stocks are attractive due to their scale, government backing, and steady growth. However, it’s important to analyse a railway company before investing thoroughly. Look into its profitability, demand, growth potential, and risks, and match it with your investment goals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.