Railway PSU Stocks Like IRCTC, IRFC, RVNL Tumble—Is This the Perfect Time for Bottom Fishing?

Despite the Indian stock market reaching new heights, railway PSU stocks have struggled over the past month, offering little to no returns for investors. Stocks like IRCTC, IRFC, and RVNL have all faced declines, with IRCTC dropping about 5.5%, IRFC losing 8%, and RVNL barely moving upwards. Railtel also saw a 2% dip in its share price.

Reasons for the Decline

Experts suggest that these railway stocks haven’t performed well due to uncertainties surrounding the upcoming Lok Sabha elections in 2024 and the high baseline in the first quarter of FY25, leading to weak results. However, there’s potential for these stocks to bounce back once the new government is in place, with recent government decisions hinting at possible growth. Investors might consider buying IRFC and RVNL shares while they are at lower prices.

Key Factors Behind Weak Performance

Key factors for this poor performance include a slowdown in GDP growth during the first quarter of FY25, bad weather affecting freight revenue, and election-related restrictions on government activities. Despite these challenges, there are positive signs in the broader economy, such as increased private consumption and a slight rise in investment activities, which could benefit the overall stock market.

Stocks to Watch: IRFC and RVNL

Looking ahead, some experts recommend focusing on IRFC and RVNL, as IRFC finances a large portion of railway infrastructure projects, and RVNL is expected to report strong numbers following new rail project approvals.

Technical Outlook on RVNL

Technical analysis suggests that RVNL might be the best pick among railway stocks, showing potential for a rebound with a target of ₹647, possibly reaching ₹690 if the trend continues.