RVNL, IRCON, RITES, Titagarh, Jupiter Wagons: Antique shares Q1 results preview for railways cos, picks 2 stocks

Antique Stock Broking in its Q1 results preview note said railways as a sector has continue to enjoy increased allocation in the fiscal budget. It sees an increased wagon procurement to benefit companies such as Titagarh Rail Systems Ltd and Jupiter Wagons Ltd. In the infrastructure space, Rail Vikas Nigam Ltd (RVNL) Ltd and IRCON International Ltd stand to benefit, the broking firm said in its latest note.

The railway expenditure for the financial year 2024-25 (FY25) is pegged at Rs 2.6 lakh crore.  The icing on the cake is that export opportunities are popping up as well, Antique said.

"After winning orders from Mozambique (Rs 300 crore) and Bangladesh (Rs 830 crore),  RITES has the potential for new inflows from Zimbabwe (Rs 850 crore), where negotiations are yet to translate into a LoA. RVNL too has submitted expression of interest to Botswana Railways, then the Namibia Trans Kalhari project team," it noted.

For the June quarter, Antique Stock Broking expects revenue for its coverage universe (five companies) to register 12 per cent YoY growth on account of strong growth in the wagon manufacturing space.

The construction segment may pick up going ahead as orders flow in after the recently concluded union elections, it said.

"We expect margins to remain flat at 8.2 per cent for our coverage universe impacted by margin contraction in RITES (187 bps, due to increased competitive bidding). However, we expect wagon manufacturers to report a 42 bps and an 18 bps YoY expansion for Titagarh and Jupiter Wagons respectively. We expect our coverage universe to report 17 per cent YoY increase in PBT and 21 per cent YoY increase in PAT for the quarter," it said.

At the aggregate level, the outlook on capex and ordering activity (especially international ordering), and execution traction of the new projects won would be key monitorable going ahead, Antique said while suggesting Titagarh Rail Systems and RITES as its top stock picks.