Stocks of companies engaged in building railway infrastructure plunged on Thursday as Railways Minister Suresh Prabhu preferred to concentrate on completing ongoing and pending projects rather than announcing many more new ones as has been the practice.
These stocks otherwise known as Rail Stocks had gained in the morning with hopes of bagging new orders but the optimism soon faded away after as the Railway Minister made his priority clear.
Amidst high volatility, six of the 10 listed Rail Stocks closed with losses, one ended flat and three with gains.
“Too much expectation was built in before the Railway Budget was announced. The rail stocks plunged as the market was disappointed with Mr Prabhu for not making any new big ticket announcement. People were looking at figures not a purely vision statement. He had laid a five year road map, which is good, but people wanted to know the finer details of what is planned for immediate future,” said Ambareesh Baliga, independent market analyst.
Market analysts said that though Indian railway would be investing Rs.8,686 crore in fast tracking of 7000 km of sanctioned works, most of these orders have already been placed, leaving little scope for new orders for these companies this year.
The announcement that the Railways would invest Rs.96,182 crore in 77 new projects covering 9,400 km of doubling/tripling/quadrupling works along with their electrification, did bring some respite though. But the market anticipated much more.
Following this bearish outlook, Stone India plunged 6.07 per cent to close at Rs.79.70; Kalindee Rail closed with a loss of 4.05 per cent at Rs.135.10; Container Corporation closed with a loss of 3.47 per cent at Rs 1518.95; Texmaco Rail closed with a loss of 2.51 per cent at Rs 135.70, BMEL was down 1.65 per cent to close at Rs.964.05 and Voltamp Transformers closed at Rs.693, down 1.56 per cent.
Kernex Microsystems closed flat at Rs.46.55. Titagarh Wagons closed with a gain of 0.50 per cent at Rs 582.10 while Transformers & Rectifiers closed at Rs 193.90, up 3.97 per cent and Hind Rectifiers closed with a gain of 14.71 at Rs.89.30 on the BSE.
A day before the Railway Budget, most of the Rail Stocks had plunged amidst anxiety.
