Best Railway Stocks to Buy in India

The Indian railways network has long been a central pillar of the nation’s transport infrastructure, playing a vital role in the economy. Reflecting its significance, the Interim Budget for 2024-2025 earmarked an impressive Rs 2.55 lakh cr. for the Indian Railways, marking a 5.8% increase from the previous year’s budget. This financial commitment spurred investor confidence, propelling Indian railway stocks to notable heights, with many recording double-digit growth in the past year. Therefore, for investors with a renewed interest in railway stocks, in this Indian rail blog, we will explore the Indian railway stocks list with prices, rail coach companies, and much more. Let’s begin.

Top Railway Stocks in India (2024)

Here is a list of railway stocks in India:

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on this railway stocks screener is dynamic in nature and subject to real-time changes. This data is derived from Tickertape Stock Screener.

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

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Indian Railway Shares in India (2024): An Overview

When comparing railway stocks share prices, it’s essential to consider not just the price but also the company’s overall financial health. Here is a brief overview of the top 5 railway stocks in India, based on their return on equity (ROE):

Indian Railway Catering and Tourism Corporation Ltd

This midcap railway listed company is a government-owned company that is considered among the best railway companies in India with high market capitalisation and also among railway PSU stocks in India. Provides catering, tourism, and online ticketing services for Indian Railways, it is one of the largest railway catering companies in the world and has expanded its services to include luxury tourist trains, hotel bookings, and various tourism packages. As of 16th October 2024, the market capitalisation of this IRCTC stock is Rs. 71,624 cr., and its IRCTC share price closed at Rs. 892.60. 

Jupiter Wagons Ltd

Jupiter Wagons Limited designs and sells railway wagons, wagon components, and railway equipment both in India and abroad. Their range includes open, covered, flat, hopper, container, and special-purpose wagons. This railway stock in India also supplies essential wagon accessories like alloy steel cast bogies, high tensile centre buffer couplers, and high-capacity draft gears. Over the last 5 years, the company’s revenue has grown at a yearly rate of 60.81%, higher than the industry average of 16.05%, and its market share increased from 3.53% to 18.58%. Investors looking for railway stocks to buy should take a note of these numbers.

Rail Vikas Nigam Ltd

RVNL is one of the railway infrastructure companies in India. It is responsible for executing railway infrastructure projects in India. This company focuses on the construction of new railway lines, doubling and gauging conversion of existing tracks, and modernisation of railway stations. In addition to railway-related projects, the company also undertakes projects related to the electrification of railway lines. It is one of the top 10 train manufacturers in India when sorted according to their ROE. As of 16th October 2024, the company had a market capitalisation of Rs. 98,871 cr.. This midcap stock’s market share increased from 8.64% to 11.19% over the last 5 years, and its performance stands out on the Indian railway stocks list with price.

Titagarh Rail Systems Ltd

Titagarh Rail Systems Ltd is a leading private railway sector shares company engaged in the manufacturing of railway wagons, coaches, and steel castings. The company specialises in freight wagons, including open and covered wagons, flat wagons, and specialised wagons for carrying specific goods. The company has a market capitalisation of Rs. 15,441 cr. as of 16th October 2024. Over the last 5 years, the company’s revenue has grown at a yearly rate of 19.58%, higher than the industry average of 16.05%. Additionally, the market share increased from 16.49% to 19.72% during the same period. This stock is frequently mentioned in the railway stock list and is considered one of the best railway shares to buy.

Ramkrishna Forgings Ltd

Ramkrishna Forgings Limited manufactures forgings. The company was established in 1981 and is headquartered in Kolkata, West Bengal. It is known for delivering high-quality forged, machined, and fabricated products to a wide range of sectors. These sectors include Automotive, Railways, Farm Equipment, Earth Moving, Mining & Construction, Oil & Gas, Power, and General Engineering. As of 16th October 2024, the smallcap company in the railway sector stocks list has a market capitalisation of Rs. 18,927 cr. The company’s market share increased from 20.04% to 20.18% during the same period.

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How to Invest in the Best Rail Stocks in India?

There are several avenues to invest in the best rail stocks in India, catering to different risk appetites and investment styles. One can invest individually or by buying mutual funds or exchange-traded funds (ETFs) that invest in rail stocks. You can also invest a fixed amount regularly in railway-focused mutual funds or ETFs through systematic investment plans (SIPs) to benefit from rupee-cost averaging and long-term wealth creation.

Investing in the Railway Sector Through smallcase

Did you know you can invest in the listed railway stocks in India selected by SEBI-Registered analysts? Yes, with smallcase, it is possible.

Let’s learn more about smallcase. 

A smallcase is a basket or portfolio of stocks and/or ETFs that represents a specific theme, strategy, or objective. smallcase offers a convenient, hassle-free way to invest in a diversified portfolio. It is created and managed by SEBI-registered investment professionals (also known as smallcase managers).

Among 500+ smallcases, here are two railway smallcases that may interest you:

Omni Bullet Train-Great Indian Railways smallcase by Omniscience Capital

Omni Future of Mobility smallcase by Omniscience Capital

Disclosures for Omni Bullet Train-Great Indian Railways & Omni Future of Mobility smallcase

What are Rail Stocks?

Rail stocks in India refer to the shares of companies that are directly or indirectly involved in the Indian railway industry. These companies engaged in various activities related to the railways, such as manufacturing rolling stock (locomotives, coaches, and wagons), providing railway infrastructure, offering logistics and freight services, or operating trains. Investing in railway stocks listed in NSE allows individuals to potentially benefit from the growth and development of the railway sector in India. Key players in this railway share market include rail coach companies and those involved in rail-related infrastructure projects. Additionally, investors can also look at railway ETFs to diversify their portfolios.

Budget 2024’s allocation for Railways Sector

The total budget allocation for Indian Railways in FY 2024-2025 is Rs. 2.52 lakh cr., unchanged from the interim Budget, marking a 5% increase from the previous year’s allocation. This includes Rs. 1.08 lakh cr. dedicated to enhancing safety measures such as track upgrades, signalling improvements, and the installation of the Kavach system.

Indian Railways will receive a capital expenditure push for infrastructure development, electrification, signalling, and station enhancements. However, the Internal and Extra-Budgetary Resources (IEBR) have been reduced to Rs. 13,000 cr. for FY 2024-2025, down from Rs. 52,783 cr. projected for 2023-2024, with the total IEBR for 2023-2024 being Rs. 20,000 cr.

Key Allocations:

• Track Renewal: Rs. 17,651.98 cr. for FY 2024-2025, up from Rs. 16,826.36 cr. in 2022-2023.
• Gauge Conversion: Rs. 4,719.50 cr. for FY 2024-2025, up from Rs. 4,278.54 cr. last year.
• Doubling Lines: Rs. 29,312.19 cr. for FY 2024-2025, down from Rs. 35,046.03 cr. the previous year.
• New Lines: Rs. 34,602.75 cr. for FY 2024-2025, slightly higher than the Rs. 34,410 cr. spent last year.

Indian Railways plans to manufacture an additional 10,000 general coaches beyond the previously announced 2,500. The operating ratio target for 2024-2025 is set at 98.22%, an improvement from 98.65% in 2023-24. Revenue from the passenger segment rose to Rs. 73,000 cr. in 2023-24, with a target of Rs. 80,000 cr. for 2024-2025. Freight transportation revenue fell short by approximately Rs 10,000 crore, reaching Rs. 1,64,700 cr. in 2023-2024, with a target of Rs. 1,74,500 cr. for 2024-2025.

The budget has allocated Rs. 8,155 cr. to the Dedicated Freight Corridor Corporation of India (DFCC) for FY 2024-2025, a significant reduction from Rs. 27,482 cr. in FY 2023-2024. Indian Railways aims to achieve 100% electrification of its network by July 2024 and lay at least 2,000 km of new tracks. The completion of the Eastern and Western Dedicated Freight Corridors (DFCs) is expected in 2024, with 100% of the Eastern DFC and around 70% of the Western DFC currently operational. The total cost of the DFCs, including supporting infrastructure, is estimated at Rs. 124,000 cr.

Scope of the Railway Industry in India for 2024

From bustling metropolises to remote villages, the railways serve as a lifeline for millions of Indians, providing affordable and efficient means of travel. The railway industry often hailed as the backbone of transportation, encompasses a vast network of railways, trains, and associated infrastructure. With a history of over 160 years, the Indian Railway sector has witnessed continuous growth. It has led many listed railway companies in India to reach new heights. Several railway sector companies are being used with government support to address the increasing need for freight services and to connect remote areas. This growth is reflected in the rising price of railway infrastructure stocks, making them an attractive option for investors.

Why Invest in Indian Rail Stocks?

Thus, if you’re looking for reasons to invest in railway-related stocks, here are some:

• Growing Sector: The Indian railway sector is booming due to government support and technological innovation. Rising demand is also attracting investors to various railway stocks to buy.
• Government Support: This is evident in the increased budget allocation for railways. Such actions boost investor confidence in the Indian railways stocks sector, making it a prominent choice for long-term investments.
• Passenger Expectation: Railways plan to revamp 40,000 bogies to Vande Bharat standards, focusing on passenger safety and comfort. This may increase demand for railway services and train stocks in India.
• Long-Term Investment: The top railway stocks in India are seen as long-term investments due to extensive infrastructure development timelines. They offer steady growth opportunities, especially for those tracking the list of railway stocks in India.
• Diverse Projects: Projects for FY 2024-25 include economic railway corridors to optimise logistics for energy, minerals, and cement. They also aim to enhance port connectivity and upgrade high-traffic corridors, supporting the PM Gati Shakti plan. These developments provide significant growth opportunities for those considering railway stocks to buy from the railway shares list.

Features of Best Rail Company Shares

Here are a few key features of the best railway stocks in India:

• Extensive Network: Fourth largest railway network globally, spanning over 68,000 km.
• Passenger-Centric: Trains are the world’s largest passenger carrier, transporting millions daily, offering consistent growth potential for the railway shares list
• Freight Powerhouse: he railway sector offers catering, tourism, parcel services, and various train types, adding diversification to the list of railway stocks in NSE.
• Diverse Services: Offers catering, tourism, parcel, and various train types.
• Modernising and Expanding: The industry is investing heavily in technology and infrastructure development, benefiting those who invest in railway stocks to buy in NSE.

Benefits of Investing in Rail Stocks in India

There are many advantages to investing in rail stocks and railway-related stocks in NSE. Here are a few of the most important ones:

• Diversification: Investing in an Indian railway stocks list with prices can help diversify an investor’s portfolio, reducing overall risk. Railway-related stocks in the NSE are not as correlated with other asset classes, such as stocks and bonds, which can help reduce an investor’s portfolio’s volatility.
• Long-Term Investment: With the potential for steady growth over time. The railway industry is cyclical, but it has a long history of growth. This makes Indian railways shares a good option for those looking for a long-term investment.
• Dividends: Many railway companies pay dividends, which can provide investors with a steady income stream. Companies in the rail sector have a history of paying dividends, making them an attractive option for investors seeking income.
• Government Support: The government often supports companies’ rail stocks, which can provide a number of benefits. For example, the government may provide subsidies for railway construction or operation. It can help reduce the cost of doing business for railway companies.
• Increasing Demand: The demand for railway services is increasing due to population growth, urbanisation, and economic growth. This increasing demand is expected to lead to increased revenue, a rise in railway share prices, and more opportunities for investors focusing on the Indian railways stocks market.

Investing in Rail Stocks: Tips and Strategies

Following the criteria below will make it easier for you to identify the best railway shares in India. 

• Do Your Research: Before investing in any rail sector stocks in India, it is important to research and understand the company’s business model, financial performance, and competitive landscape. Monitoring the railway stocks share price trends is crucial for those looking to invest in this sector
• Consider the Long Term: Railway shares or rail shares in India can often be seen as a long-term investment, with the potential for steady growth over time. Investors should be prepared to hold their investments for the long term.
• Diversify Your Portfolio: It is important to diversify your investments and not put all of your eggs in one basket. By investing in a variety of rail stocks, you can reduce your overall risk.
• Rebalance Your Portfolio Regularly: To mitigate the risk, it is important to rebalance your portfolio. It helps in ensuring that it remains aligned with your risk tolerance and investment goals.

As always, investors must research and/or consult their financial advisor before investing in railway stocks in India.

Should You Invest in India’s Railway Sector?

Investing in Indian railway stocks can be promising due to the government’s focus on infrastructure development and privatisation efforts. Stocks like Indian Railway Catering and Tourism Corporation Ltd, Rail Vikas Nigam Ltd, and Ircon International Ltd benefit from growing demand for ticketing, tourism, and freight services. IRCTC, in particular, is a key player with monopolistic advantages in online ticketing and catering, while RVNL focuses on railway infrastructure projects.

However, these stocks are also subject to government regulations and long-term project timelines, which could impact short-term returns.

Who Should Invest in Rail Stocks in India?

Investing in Indian railways stocks can be beneficial for investors aligning with the below-mentioned investing hypothesis:

• Future Scope: The railway industry is a popular investment choice due to its large scale, government support, consistent growth, technological advancements, and diverse services.
• Growth Potential: Investment attractiveness due to the railway industry’s evolution.
• Stringent Policies: The railway sector is affected by stringent government regulations, geopolitical factors, and labour disputes, which impact market performance.

Risks and Challenges of Investing in Rail Stocks

Investing in Indian railway stocks involves several risks that investors may consider. Here are the key risks to consider:

• Economic Impact: Railway demand is tied to the economy. During downturns, reduced spending can decrease passenger and freight traffic. This can hurt the revenue and profits of even the best Indian railway stocks.
• Policy Changes: Government policies significantly influence the railway sector. Changes in fares, subsidies, or infrastructure plans can affect financial performance.
• Competition: Indian Railways faces growing competition from road and air transport, which can pressure market share and pricing.
• High Debt Levels: Some railway companies, particularly infrastructure ones, have high debt levels. This exposes them to interest rate risks and debt servicing challenges.
• Cyclical Industry: The railway industry experiences cycles of growth and decline. Investors should align their decisions with industry trends and their risk tolerance.

Understanding these risks helps investors make informed decisions. Thorough research, portfolio diversification, and considering factors like government policies, financial health, and industry trends are essential. Consulting financial advisors can also provide valuable insights.

Factors to Consider Before Investing in Top Indian Rail Stocks

If you’re looking for good railway stocks to buy in India, here are some of the factors that you can consider before investing in the best railway stocks in India:

Government Policy

The Indian government is investing heavily in the railways, which positively impacts the railway sector stocks in India. This includes companies from the railway stocks list with price data reflecting these investments. The government has set a target of doubling the size of the Indian Railways network by 2030, benefiting stocks such as those in the rail coach factory share price segment. As a result, this is expected to lead to increased demand for railway services and impact the railway share price list.

Economic Growth

The Indian economy is growing rapidly, which is another positive sign for railway stocks in India. As the economy grows, more people will be able to afford to travel by train, increasing demand for the best railway stocks to buy in India. This growth also affects the broader Indian railway shares list, with companies listed in NSE and BSE expected to benefit from the surge in rail travel.

Competition

Indian railway stock investments face increasing competition from other transport modes, such as road and air travel. However, railways still have significant advantages, such as high capacity and low cost, making Indian railway related stocks a viable long-term investment. Emerging technologies like the bullet train share price could further bolster the sector’s attractiveness.

Financial Performance

Before investing, assessing the financial performance of Indian rail stock companies is crucial. This includes analysing factors such as revenue growth, profitability, and debt levels. Investors should also consider stocks listed under the integral coach factory share price for insights into performance and future potential. Checking the railway stocks listed in NSE and BSE can give a clear picture of the best options available.

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To Wrap It Up…

In conclusion, the evolution of rail stocks and the railway industry presents future growth, innovation, and enduring relevance. Thus, companies mentioned earlier might have diverse opportunities opening up for their rail sector shares. By adopting a diversified approach and staying well-informed, investors can position themselves to ride the rails of success in the ever-evolving world of rail stocks.

Are you ready to hop on board and ride the railway wave? By investing in a smallcase portfolio of rail shares, you can be part of this transformative journey and enjoy the potential benefits of a diversified investment approach. So, hop aboard and consider exploring smallcase to invest in a portfolio of rail stocks and be a part of the fascinating evolution of the railway industry.

Frequently Asked Questions About Railway Stocks