Monday, June 29, 2009

>Countdown to Railway Budget 2009-10 (WAY 2 WEALTH)

Countdown to Railway Budget : Stocks to Watch & Acquire

Beneficiaries of Railway Budget

There are handful of stocks to watch out for, which derive a large part of their business from the railways. These companies are gearing up to grab opportunities thrown up by the Indian Railways’ Plan entailing an outlay of Rs 2,30,000 crore during the 11th Five-Year Plan. These stocks are likely to be beneficiaries of the Railway Budget.

BEML : To meet the growing demand of wagons and new-gen suburban rail (EMU) coaches, the railways have already farmed out orders to various coach manufacturers, prominent among them is BEML. Thus the company will likely to benefit from the additional demand for wagons and rail coaches.

Titagarh Wagons : Indian Railways has decided to step up its share of procurements from private sector players for new-gen suburban rail (EMU) coaches. As part of the move which comes under its public-private partnership initiative, the Railway Board is shortly expected to invite fresh tenders for supplying 21 rakes from a clutch of companies, among which Titagarh Wagons is one. Moreover, as per railway officials, in the immediate future, the share of private players is only likely to go up, thus benefiting the company from the additional demand for wagons and rail coaches. Titagarh Wagons, which supplied the first coaches within six months of getting the final order and design, claims to be the first private sector player to supply EMU
coaches to Indian Railways. The company has set up a new facility at its existing factory at Hind Motor to meet the Railways order.

Stone India : Stone India is engaged in manufacturing equipment for railways like alternators, air brakes and brake regulators. The company would get business from replacement of old wagons.

Kalindee Rail Nirman : Kalindee Rail specialises in railway tracks, signaling and telecommunications. It has order book of over Rs 450 crore, including about Rs 150 crore from the Delhi Metro Rail Corporation. The huge investment earmarked by railways for freight corridor project will benefit this company. Kalindee Rail
is expected to get orders worth Rs 500 crores from the Indian Railways in next few years.

Texmaco : It is widely expected that in the railway budget, government will add more capital assets and revise the Liberalised Wagon Investment Scheme, which could generate more demand for wagons. This will boost the prospects of wagon manufacturers like Texmaco. The company has decided to raise upto Rs 200 crore of fresh resources from the market to finance future growth plans, including the setting up of a greenfield metro coach manufacturing facility. The company turned out to be the largest winner of rolling stock orders from the Indian Railways in 2008-09. It bagged orders for 3,455 wagons courtesy belated release of orders. The current order book of Texmaco stands at around Rs 1,300 crore.

To see full report: RAILWAY BUDGET