How was Railway Minister Suresh Prabhu’s “five-year action plan to transform the railways” received? Not very well, if one uses the stock market as a gauge.

Stocks of companies, which are in businesses linked to the railways, fell sharply across the board intra-day, before recovering some by the close of trade.

On BSE, wagon maker Titagarh Wagons was the only bright spot at the end of Thursday’s trading session, closing up 0.5 per cent at ₹582.10. Texmaco Rail and Engineering finished at ₹135.70, down 2.51 per cent; Container Corporation of India closed at ₹1518.95, down 3.47 per cent; Stone India ended at ₹79.70, down 6.07 per cent; and Kalindee Rail Nirman ended the day at ₹135.10, down 4.05 per cent.

Hind Rectifiers, which develops railway traction equipment, was the biggest loser, ending trade 14.71 per cent lower at ₹89.30.

Cimmco Ltd closed at ₹71.20, down 6.93 per cent, while Siemens lost 4.35 per cent to ₹1,280.90, despite reaching a new 52-week high of ₹1,368.80 in the morning trade.

Kernex Microsystems ended the day flat at ₹46.55, after breaching the upper circuit of ₹48.85 during the trade.

Vinay Khattar, Associate Director and Head of Research – Retail Capital Markets, Edelweiss, attributed the dismal response to market expectations on specific public-private partnership announcements or an increase in orders for wagon manufacturers.

“What Suresh Prabhu has delivered is a long-term vision for the Railways, when what the market expects is an execution list. But if you look at the fine print, you will see that he is planning to increase capacity. He even talked about regaining the freight market share from roads and finding new ways of funding expansion,” Khattar said.

Intra-day traders who beat the stocks down, however, weren’t looking at this. All railway stocks saw trading volumes treble on Thursday. Hind Rectifiers saw the maximum interest, with volumes jumping 10.44 times. But the percentage of deliverable quantity to traded quantity ratio was extremely low. (The lower this ratio, the less the long-term interest in the stock).

For Titagarh Wagons, this ratio stood at 5.95 per cent, Texmaco at 9.3 per cent, and Kalindee Rail Nirman at 4.58 per cent.

The pessimism in railway stocks ahead of the Railway Budget might also be partly explained as a tradition.

The sector extended its losing streak into the third day on Thursday, after several of them reached new 52-week highs at the start of the week. Khattar said this is the “trend of price movements ahead of Railway budgets, and should not be seen only as a response to budget announcements”.

The industry is looking at how the Budget vision translates into work on the ground. Umesh Chowdhary, Vice-Chairman and MD, Titagarh Wagons, told BusinessLine that “implementation” of the promises made in the Rail Budget would obviously be key, going forward.

“The Budget underlines long-term positives for the wagon industry, particularly for companies with manufacturing capabilities for producing high-end, improved products and designs.”

Titagarh’s price oscillations, however, have him as confused as anyone else.

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