Railway PSU stocks: Top railway public sector undertaking stocks, including Rail Vikas Nigam Limited, Indian Railways Finance Corporation (IRFC), IRCON International, RITES, to Indian Railway Catering and Tourism Corporation (IRCTC), have seen a sharp decline of up to 40% over the past year.
The steep correction has left investors wondering what went wrong and whether the worst is over. Let’s understand from experts, along with their take on railway PSU stocks outlook.
The decline in railway PSU stocks is more of a correction after decades of rally, according to Tushar Badjate, Director of Badjate Stock & shares Pvt Ltd.
"This is a valuation correction first and an earnings correction second. In 2023 and 2024, these stocks were priced for a decade of perfection. IRCTC hit an all-time high of ₹1,318 in May 2024 and is now down about 61% from that peak. RVNL and IRFC have fallen between 45% and 53% from their 52-week highs,” added Badjate while highlighting that three things went wrong for these PSU stocks.
Slow growth and decline in margins were among the key things that went wrong for railway PSUs. “What did not break is spending. Railway capex for FY27 is a record ₹2.93 lakh crore. The money is flowing. It is just not reaching these companies at the old margins,” highlighted Badjate.