Railway stocks today: Railway shares have plummeted by up to 33% over the past two days, as the narrow victory of Prime Minister Narendra Modi's alliance has sparked concerns about policy continuity. Shares of
Titagarh Rail Systems
have plummeted by nearly 33% and Ircon International declined by over 26% in the last two days.
RailTel Corporation
and
IRCTC
also saw drops of over 19% in the past two days, while
RITES
, IRFC,
RVNL
,
Texmaco Rail Systems
, and Jupiter Wagons faced declines ranging from 18% to 23%.
On Wednesday, railway stocks fell by up to 17%.
The election results showed that the Bharatiya Janata Party (BJP) secured 240 seats, which is below the 272 seats required for a simple majority in the 543-member lower house of parliament.
"Despite the reduced majority, we expect the policy agenda of Modi 2.0 (investment-led growth, capex, infrastructure creation, manufacturing, etc.) to continue, although with some tweaks," said Motilal Oswal, a brokerage firm, according to an ET report.
Motilal Oswal also commented on the future performance of various sectors, saying, "Sectors with over-heated valuations and recent sharp outperformance, such as Industrials, Railways, Defense, and PSUs, may see more moderation in valuations before they become attractive again from a risk-reward perspective."
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Other PSU stocks, including Cochin Shipyard and Bharat Dynamics, experienced a 10% drop as the BSE PSU index fell by 4%. Stocks like NBCC, HUDCO, Indian Bank, and REC saw a decline of more than 5%.
Additionally, shares of NTPC, CONCOR, Hindustan Copper, GIC, Central Bank of India, NMDC, Powergrid, PFC, BEL, PNB, UCO Bank, Union Bank of India, HAL, BHEL, and SJVN, among others, fell by more than 3%.
Despite the market downturn, analysts maintain a positive outlook on PSUs as the BJP is set to return to power. Manish Sonthalia, Chief Investment Officer at Emkay Investment Managers, anticipates strong performance from BFSI, PSUs, and industrials.
Sonthalia said, "BFSI has led the earnings growth and seen a correction in valuation. Investment-related themes will come into play with power capex building up in the next 3 to 5 years. We are re-rating public sector units as some of the government entities will have an advantage in sectors such as defence, oil marketing companies, and power financers."
The Chief Investment Officer (CIO) of Quant Mutual Fund believes that Modi's return to power could be seen as an endorsement of the previous government's policies, indicating that infrastructure, manufacturing, and PSUs will continue to be key themes.
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