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Metal, electrical scrips cheer Railway budget

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Atul SathePayal Tibrewala Mumbai
Last Updated : Feb 25 2013 | 11:50 PM IST
The railway budget proposes to spend Rs 22,000 over the next 3-4 years on the freight corridors. Along with expansion and new tracks, the government would go for aluminium and stainless steel wagons.
 
This augurs well for aluminium and stainless steel companies. Rail manufacturing companies like SAIL and Jindal Steel & Power are also expected to benefit.
 
Pritish Vinay from Edelweiss Securities said, "Overall, the railway budget has been neutral for the steel sector as there has been no change in the freight rates of iron ore and coal. Introduction of aluminium and stainless steel wagons is a big boost for companies operating in the sector. The Aluminium Association has been lobbying for it for a long time."
 
The budget says that modern signaling and telecom methods will be used for improving safety and enhancing line capacity on trunk and main routes. Analysts feel that this will benefit companies operating in overhead wires, signalling equipment and machine tools.
 
On Friday, companies from this sector Kernex Microsystems (up 19.23 per cent), Kalindee Rail Nirman (up 4.98 per cent), HMT (up 4.74 per cent) and Bharat Electronics (up 7.99 per cent) gained.
 
The budget speech mentions that in order to meet rising traffic, an increase of about 25 per cent will be made in wagon manufacture next year.
 
But, some observers feel that building aluminium and stainless steel wagons will not have a significant incremental growth in the existing national demand for the same.
 
Gainers among metal stocks were Tata Steel (up by 0.86 per cent) and JSW Steel (up 0.87 per cent). However, the BSE Metals index was dragged down by 0.09 per cent by stocks like Jindal Saw (down 4.4 per cent), Sail (down 2.72 per cent) and Nalco (down 1.5 per cent).

 
 

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