Best Indian Rail Stocks in 2024: List of Fundamentally Strong Railway Shares

The Indian railways network has long been a central pillar of the nation’s transport infrastructure, playing a vital role in the economy. Reflecting its significance, the Interim Budget for 2024-2025 earmarked an impressive Rs 2.55 lakh cr. for the Indian Railways, marking a 5.8% increase from the previous year’s budget. This financial commitment spurred investor confidence, propelling railway-related stocks to notable heights, with many recording double-digit growth in the past year. Therefore, for investors with a renewed interest in railway stocks, in this blog, we will explore a list of railway stocks in NSE, while delving deeper into Indian railway stock prices, rail coach companies, and much more. Let’s begin.

Top Railway Stocks in India (2024)

Stock Name	Sub-Sector	Market Cap (in Cr)	Stock Price	ROE (%)	P/E Ratio
Indian Railway Catering and Tourism Corporation Ltd	Online Services	₹80,484	₹1,026.20	46.26%	72.44
Rail Vikas Nigam Ltd	Specialized Finance	₹87,310	₹491.05	20.81%	55.45
Ramkrishna Forgings Ltd	Rail	₹17,325	₹984.15	20.68%	50.74
RITES Ltd	Business Support Services	₹17,967	₹762.70	20.40%	39.45
Jupiter Wagons Ltd	Rail	₹29,734	₹730.00	16.25%	89.68
Ircon International Ltd	Construction & Engineering	₹26,310	₹307.75	15.47%	28.30
Indian Railway Finance Corp Ltd	Specialized Finance	₹2,32,253	₹188.23	14.66%	36.22
Titagarh Rail Systems Ltd	Rail	₹24,092	₹1,828.95	14.42%	84.20
Railtel Corporation of India Ltd	Communication & Networking	₹15,613	₹519.75	11.91%	63.42
Container Corporation of India Ltd	Logistics	₹62,912	₹1,057.90	10.58%	49.91

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the list of top railway stocks in India is from 5th July 2024. The railway sector share list is sorted according to their return on equity (ROE). This data is derived from Tickertape Stock Screener.
🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

Indian Railway Shares in India 2024 – An Overview

Here is a brief overview of the top railway stocks in India:

Indian Railway Catering and Tourism Corporation Ltd

This midcap railway listed company is a government-owned company that is considered among the best railway companies in India with high market capitalisation and also among railway PSU stocks in India. Provides catering, tourism, and online ticketing services for Indian Railways, it is one of the largest railway catering companies in the world and has expanded its services to include luxury tourist trains, hotel bookings, and various tourism packages. As of 5th July 2024, the market capitalisation of this IRCTC stock is Rs. 82,096 cr. and the debt-to-equity ratio is 2.89%. 

Rail Vikas Nigam Ltd

RVNL is one of the government-owned stocks in the railway share list responsible for executing railway infrastructure projects in India. This company focuses on the construction of new railway lines, doubling and gauging conversion of existing tracks, and modernisation of railway stations. Other than railway-related projects, the company also undertakes projects related to the electrification of railway lines. With a market capitalisation of Rs. 77,249 cr., this midcap railway best stock’s market share has also increased from 7.46% to 12.02% over the last 5 years.

Ramkrishna Forgings Ltd

Ramkrishna Forgings Limited manufactures forgings. The company was established in 1981 and is headquartered in Kolkata, West Bengal. It is known for delivering high-quality forged, machined, and fabricated products to a wide range of sectors. These sectors include Automotive, Railways, Farm Equipment, Earth Moving, Mining & Construction, Oil & Gas, Power, and General Engineering. The smallcap company in the railway sector stocks list has a market capitalisation of Rs. 12,664 cr. The company’s revenue growth at a yearly rate is 16.41% over the last 5 years. The market share has increased from 19.65% to 21.36% during the same period.

RITES Ltd

RITES Ltd is a smallcap rail company in India, which is a dedicated financing arm of the Indian railway share list. Thus, it is responsible for raising funds to finance railway projects and infrastructure development. The smallcap company has a market capitalisation of Rs.18,327 cr. as of 5th July, 2024. Furthermore, the company’s debt-to-equity ratio has been 1.28% over the last 5 years.

Jupiter Wagons Ltd

Jupiter Wagons Limited, formerly Commercial Engineers & Body Builders Company Limited, is a manufacturer of railway wagons, passenger coaches, wagon components and castings in India. As of 5th July 2024, the market capitalisation of the company is Rs. 30,097 cr. Over the last 5 years, the company’s revenue has grown at a yearly rate of 83.99%. Additionally, the company’s market share has also increased from 1.29% to 13.85%. In terms of debt to equity ratio, it has been 30.31%, vs the industry average of 60.79%.

Ircon International Ltd

Ircon International, also known as Indian Railway Construction International Limited, is an Indian engineering and construction company focused on transport infrastructure. Founded in 1976 by the Indian Railways, it operates as a public sector undertaking under the Indian Companies Act of 1956. Over the last 5 years, the company’s revenue has grown at a yearly rate of 20.85%, higher than the industry average of 8.78%. In the same period, the company’s market share increased from 1.63% to 2.86%.

Indian Railway Finance Corp Ltd

IRFC is a dedicated financing arm of the Indian Railways. It is responsible for raising funds to finance railway projects and infrastructure development. Considered one of the best railway stocks in India that primarily focuses on leasing rolling stock (locomotives, coaches, wagons) to the Indian Railways. This large-cap stock in the railway sector stocks list has a market capitalisation of Rs. 2,45,988 cr. as of 5th July 2024. The annual rate of revenue has grown at a yearly rate of 20.89% over the last 5 years. The company’s market share has also increased from 8.73% to 13.42% during the same period.

Titagarh Rail Systems Ltd

Titagarh Rail Systems Ltd is a leading private railway sector shares company engaged in the manufacturing of railway wagons, coaches, and steel castings. The company specialises in freight wagons, including open and covered wagons, flat wagons, and specialised wagons for carrying specific goods. Furthermore, with a market capitalisation of Rs. 16,525 cr., the company has witnessed a tremendous revenue growth of 16.8% at a yearly rate. Additionally, the market shares increased from 17.06% to 18.85% during the same period.

Railtel Corporation of India Ltd

Railtel, listed on the stock exchange, frequently hits upper circuit limits as it plays a crucial role in India’s digital transformation within the railway sector. Thus, the company’s involvement in providing high-speed internet and telecom services to the railway industry makes it a sought-after stock with growth potential, leading to upper-circuit trends. As of 5th July 2024, this railway company in India has a market capitalisation of Rs. 16,680 cr. The company’s revenue growth at a yearly rate has also increased by 14.19% over the past 5 years.

Container Corporation of India Ltd

CONCOR is a Navratna public sector undertaking under the Indian Ministry of Railways. CONCOR is one of the best railway shares that provides end-to-end logistics solutions, including storage, handling, and transportation of containerized cargo. This midcap Indian railways subsidiaries occupy 9.91% of the market share. This Indian railway-related share has a market capitalisation of Rs. 67,196 cr. and is 2.85x as volatile as Nifty. The debt-to-equity ratio has been 5.72%, while the current ratio has been 257.26%, over the last 5 years.

How to Invest in the Best Rail Stocks in India?

There are several avenues to invest in the best rail stocks in India, catering to different risk appetites and investment styles. One can invest individually or by buying mutual funds or exchange-traded funds (ETFs) that invest in rail stocks. You can also invest a fixed amount regularly in railway-focused mutual funds or ETFs through systematic investment plans (SIPs) to benefit from rupee-cost averaging and long-term wealth creation.

Investing in the Railway Sector Through smallcase

Did you know you can invest in the best Indian railway stocks selected by SEBI-Registered analysts? Yes, with smallcase, it is possible.

Let’s learn more about smallcase. 

A smallcase is a basket or portfolio of stocks and/or ETFs that represents a specific theme, strategy, or objective. smallcase offers a convenient, hassle-free way to invest in a diversified portfolio. It is created and managed by SEBI-registered investment professionals (also known as smallcase managers).

Among 500+ smallcases, here are two railway smallcases that may interes

Omni Bullet Train-Great Indian Railways smallcase by Omniscience Capital

Omni Future of Mobility smallcase by Omniscience Capital

Disclosures for Omni Bullet Train-Great Indian Railways & Omni Future of Mobility smallcase

What are Rail Stocks?

Rail stocks in India refer to the shares of companies that are directly or indirectly involved in the Indian railway industry. These companies engaged in various activities related to the railways, such as manufacturing rolling stock (locomotives, coaches, and wagons), providing railway infrastructure, offering logistics and freight services, or operating trains. Investing in railway stocks listed in NSE allows individuals to potentially benefit from the growth and development of the railway sector in India. Key players in this market include rail coach companies and those involved in rail-related infrastructure projects. Additionally, investors can also look at railway ETFs to diversify their portfolio.

Budget 2024’s allocation for Railways Sector

The total budget allocation for Indian Railways in FY 2024-2025 is Rs. 2.52 lakh cr., unchanged from the interim Budget, marking a 5% increase from the previous year’s allocation. This includes Rs. 1.08 lakh cr. dedicated to enhancing safety measures such as track upgrades, signalling improvements, and the installation of the Kavach system.

Indian Railways will receive a capital expenditure push for infrastructure development, electrification, signalling, and station enhancements. However, the Internal and Extra-Budgetary Resources (IEBR) have been reduced to Rs. 13,000 cr. for FY 2024-2025, down from Rs. 52,783 cr. projected for 2023-2024, with the total IEBR for 2023-2024 being Rs. 20,000 cr.

Key allocations include:

• Track Renewal: Rs. 17,651.98 cr. for FY 2024-2025, up from Rs. 16,826.36 cr. in 2022-2023.
• Gauge Conversion: Rs. 4,719.50 cr. for FY 2024-2025, up from Rs. 4,278.54 cr. last year.
• Doubling Lines: Rs. 29,312.19 cr. for FY 2024-2025, down from Rs. 35,046.03 cr. the previous year.
• New Lines: Rs. 34,602.75 cr. for FY 2024-2025, slightly higher than the Rs. 34,410 cr. spent last year.

Indian Railways plans to manufacture an additional 10,000 general coaches beyond the previously announced 2,500. The operating ratio target for 2024-2025 is set at 98.22%, an improvement from 98.65% in 2023-24. Revenue from the passenger segment rose to Rs. 73,000 cr. in 2023-24, with a target of Rs. 80,000 cr. for 2024-2025. Freight transportation revenue fell short by approximately Rs 10,000 crore, reaching Rs. 1,64,700 cr. in 2023-2024, with a target of Rs. 1,74,500 cr. for 2024-2025.

The budget has allocated Rs. 8,155 cr. to the Dedicated Freight Corridor Corporation of India (DFCC) for FY 2024-2025, a significant reduction from Rs. 27,482 cr. in FY 2023-2024. Indian Railways aims to achieve 100% electrification of its network by July 2024 and lay at least 2,000 km of new tracks. The completion of the Eastern and Western Dedicated Freight Corridors (DFCs) is expected in 2024, with 100% of the Eastern DFC and around 70% of the Western DFC currently operational. The total cost of the DFCs, including supporting infrastructure, is estimated at Rs. 124,000 cr.

Scope of the Railway Industry in India for 2024

From bustling metropolises to remote villages, the railways serve as a lifeline for millions of Indians, providing affordable and efficient means of travel. The railway industry often hailed as the backbone of transportation, encompasses a vast network of railways, trains, and associated infrastructure. With a history of over 160 years, the Indian Railway sector has witnessed continuous growth. It has led many listed railway companies in India often reaching new heights. Several railway sector companies are being used with government support to address the increasing need for freight services and to connect remote areas. This growth is reflected in the rising price of railway stocks, making them an attractive option for investors.

Why Invest in Indian Rail Stocks?

Thus, if you’re looking for reasons to invest in railway-related stocks, here are some:

• Growing Sector: ​​The Indian railway sector is experiencing a boom due to government support, technological innovation, and rising demand, attracting investors.
• Government Support: This is evident in the increased budget allocation for railways, which boost investor confidence in the sector’s growth prospects.
• Diverse Projects: For FY 2024-25 include economic railway corridors aimed at optimising logistics for energy, minerals, and cement, enhancing port connectivity, and upgrading high-traffic corridors, crucial for the PM Gati Shakti plan.
• Passenger Expectation: Railways plan to revamp 40,000 bogies to Vande Bharat standards, focusing on passenger safety and comfort, which may increase demand for railway services and, ultimately, train stocks in India.
• Long-Term Investment: The top railway stocks in India are seen as long-term investments due to the extensive time required for infrastructure development, offering steady growth opportunities.

Features of Best Rail Company Shares

Here are a few key features of the best railway stocks to buy in India:

• Extensive Network: Fourth largest railway network globally, spanning over 68,000 km.
• Passenger-Centric: Trains are the world’s largest passenger carrier and they transport millions daily.
• Freight Powerhouse: Key player in goods transportation, supporting India’s economic growth.
• Diverse Services: Offers catering, tourism, parcel, and various train types.
• Modernising and Expanding: Investing heavily in technology and infrastructure development.

Benefits of Investing in Rail Stocks in India

There are many advantages to investing in rail stocks and railway related shares. Here are a few of the most important ones:

• Diversification: Investing in an Indian railway stocks list can help diversify an investor’s portfolio, reducing overall risk. Railway-related stocks in the NSE are not as correlated with other asset classes, such as stocks and bonds, which can help reduce an investor’s portfolio’s volatility.
• Long-Term Investment: With the potential for steady growth over time. The railway industry is cyclical, but it has a long history of growth. This makes Indian railways shares a good option for those looking for a long-term investment.
• Dividends: Many railway companies pay dividends, which can provide investors with a steady income stream. Companies in the rail sector have a history of paying dividends, making them an attractive option for investors seeking income.
• Government Support: The government often supports companies’ rail stocks, which can provide a number of benefits. For example, the government may provide subsidies for railway construction or operation, which can help reduce the cost of doing business for railway companies.
• Increasing Demand: The demand for railway services is increasing due to population growth, urbanisation, and economic growth. This increasing demand is expected to lead to increased revenue, a rise in railway share prices, and more.

Investing in Rail Stocks: Tips and Strategies

Following the criteria below will make it easier for you to identify the best railway shares in India. 

• Do Your Research: Before investing in any rail sector stocks in India, it is important to research and understand the company’s business model, financial performance, and competitive landscape.
• Consider the Long Term: Railway shares or rail shares in India can often be seen as a long-term investment, with the potential for steady growth over time. Investors should be prepared to hold their investments for the long term.
• Diversify Your Portfolio: It is important to diversify your investments and not put all of your eggs in one basket. By investing in a variety of rail stocks, you can reduce your overall risk.
• Rebalance Your Portfolio Regularly: To mitigate the risk, it is important to rebalance your portfolio. It helps in ensuring that it remains aligned with your risk tolerance and investment goals.

As always, investors must research and/or consult their financial advisor before investing in railway stocks in India.

Who Should Invest in Railway Sector Stocks in India?

Investing in railway stocks is beneficial for investors aligning with below mentioned investing hypothesis:

• Future Scope: The railway industry is a popular investment choice due to its large scale, government support, consistent growth, technological advancements, and diverse services.
• Growth Potential: Investment attractiveness due to the railway industry’s evolution.
• Stringent Policies: The railway sector is affected by stringent government regulations, geopolitical factors, and labour disputes, which impact market performance.

Risks and Challenges of Investing in Railway Sector Stocks

Investing in Indian railway stocks involves several risks that investors may consider. Here are the key risks to consider:

• Economic Impact: Railway demand is tied to the economy. During downturns, reduced spending can decrease passenger and freight traffic, hurting revenue and profits.
• Policy Changes: Government policies significantly influence the railway sector. Changes in fares, subsidies, or infrastructure plans can affect financial performance.
• Competition: Indian Railways faces growing competition from road and air transport, which can pressure market share and pricing.
• High Debt Levels: Some railway companies, particularly infrastructure ones, have high debt levels. This exposes them to interest rate risks and debt servicing challenges.
• Cyclical Industry: The railway industry experiences cycles of growth and decline. Investors should align their decisions with industry trends and their risk tolerance.

Understanding these risks helps investors make informed decisions. Thorough research, portfolio diversification, and considering factors like government policies, financial health, and industry trends are essential. Consulting financial advisors can also provide valuable insights.

Factors to Consider Before Investing in Top Indian Rail Stocks

If you’re looking for best railway stocks to buy in India, here are some of the factors that you can consider before investing in the best railway stocks in India:

• Government Policy: The Indian government is investing heavily in the railways. It is a positive sign for the railway sector stocks in India. Therefore, the government has set a target of doubling the size of the Indian railways stock list network by 2030. As a result, this is expected to lead to increased demand for railway services.
• Economic Growth: The Indian economy is growing rapidly, which is another positive sign for the railway sector stocks. As the economy grows, more people will be able to afford to travel by train, which will lead to increased demand for the best railway stocks in India.
• Competition: The Indian railway stock investments face increasing competition from other modes of transport, such as road and air travel. However, the railways still have several advantages, such as their high capacity and low cost.
• Financial Performance: Before investing, it is important to assess the financial performance of the Indian rail stock companies. Consider factors such as revenue growth, profitability, and debt levels.

To Wrap It Up…

In conclusion, the evolution of rail stocks and the railway industry presents future growth, innovation, and enduring relevance. Thus, companies mentioned earlier might have diverse opportunities opening up for their rail sector shares. By adopting a diversified approach and staying well-informed, investors can position themselves to ride the rails of success in the ever-evolving world of rail stocks.

Are you ready to hop on board and ride the railway wave? By investing in a smallcase portfolio of rail shares, you can be part of this transformative journey and enjoy the potential benefits of a diversified investment approach. So, hop aboard and consider exploring smallcase to invest in a portfolio of rail stocks and be a part of the fascinating evolution of the railway industry.

Frequently Asked Questions About Railway Stocks