Rail-related stocks down as expectations muted ahead of rail budget
The ministry is likely to propose a plan outlay of $12.5 billion for FY14, which would be the highest railways have ever been allotted.
Most of the rail-related stocks are down along with the borad market which declined due to concerns about the global economy.
Shares of Titagarh Wagons were down 2.4%, Texmaco Rail and Engineering 2.3%, Kalindi Rail Nirman 3% and Kernex Microsystems down 2.6%. The only ones that were up are CEBBCO (1.6%) and BEML (2.5%)
The downbeat sentiment is also because of the muted expectations from the budget.
"The expectations are very muted, especially considering the fact that the Finance Minister has clearly hinted that there are going to be spending cuts across various sectors," Mehraboon Irani, analyst, Nirmal Bang Securities, told CNBC TV18.
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According to a Macquaries report citing media, the ministry is likely to propose a plan outlay of $12.5 billion for FY14, which would be the highest railways have ever been allotted.
More from InvestingIt sees IRFC's market borrowing rising to around $3.5 billion in the next year.
In light of the spike in diesel prices, there may be an increase in electrification works from an estimated 1200 route km in FY13 to 1,500 route km in FY14, the report said.
This is likely to boost sentiment for stocks such as L&T and Siemens.
Other stocks to watch out for are IVRCL and BHEL.
However, with the precarious government finances, the market can only hope that the rail minister will focus on infrastructure development, which will boost sentiment across sectors.
