Investing in the Future: Railway PSU Stocks to Watch

In recent years, Public Sector Undertaking (PSU) stocks have faced considerable selling pressure. However, recent movements on Dalal Street indicate a potential turnaround for select railway PSU stocks, drawing the attention of long-term investors. As the Government of India ramps up its focus on railway infrastructure, stocks like IRFC, RVNL, RailTel, CONCORD, and Ircon International are emerging as attractive options for savvy buyers.

Why Railway Stocks Are Gaining Momentum

According to market analysts, recent corrections have left many quality railway stocks available at appealing discounts. The downturn was largely influenced by the Union Budget 2025, which did not announce major railway infrastructure projects. Nevertheless, the recent approval of four new projects by the Union Cabinet, totaling ₹18,658 crore, has reignited buying interest among investors. This renewed optimism suggests that investing in these stocks, especially at current low prices, could yield significant long-term benefits.

• Key Points:
  • Railway PSU stocks recently approved for four major projects.
  • ₹18,658 crore earmarked for infrastructure improvements.
  • Buying opportunities arise due to previous market corrections.

Insights from Market Experts

Avinash Gorakshkar, Head of Research at Profitmart Securities, notes that after the cabinet’s announcement, railway PSU stocks caught the eye of market bulls. Though initial reactions were muted due to a rough start to the week, Friday’s trading showed signs of value buying, indicating a possible upward trend. Gorakshkar emphasizes prioritizing IRFC due to its pivotal role in financing railway infrastructure.

Comparing the Top Railway PSU Stocks

When evaluating the leading railway PSU stocks, Prashanth Tapse, Senior Vice President of Research at Mehta Equities, offers valuable insights:

• IRFC: Best suited for conservative investors. It functions as the dedicated financing arm of Indian Railways, benefiting from government support and offering solid dividend yields.
• RVNL: A more aggressive option for those open to short-term risks. RVNL is instrumental in modernizing Indian railways, including critical areas such as track laying and electrification.

Tapse suggests that a balanced investment strategy should include both IRFC and RVNL, catering to different risk appetites among investors.

Price Targets and Technical Analysis

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, has analyzed the technical charts for these stocks and offers the following insights:

• IRFC: After a significant correction of 52% over 33 weeks, technical indicators reveal a potential rebound. A target price of ₹140 seems achievable given the recent bullish patterns.

• RVNL: This stock has also experienced a 52% decline over 38 weeks but has bounced off a key support level at ₹311. A rebound to ₹388 is possible based on current trends.

• RailTel: Down 56% in 39 weeks, RailTel’s technical patterns suggest a potential bounce back to ₹333 after consolidating at around ₹275.

Conclusion: A Promising Future for Railway Stocks

While all three railway PSU stocks show signs of recovery, IRFC stands out with a stronger technical structure, making it a favorable choice for investors looking to capitalize on the railway sector’s rebound. With ongoing government initiatives and infrastructure projects, the future looks bright for railway PSU stocks, presenting an enticing opportunity for long-term investors.

By keeping a close eye on these developments, investors can position themselves advantageously in this dynamic market.