January 19, 2024 – Eqwires Best Intraday tips provider in India, top trading tips company, Best Stock Advisory service in India

Railway-related stocks rally up to 18%; IRFC m-cap crosses Rs 2 trillion

Shares of railway-related companies were on a roll and rallied up to 18 percent on the BSE in Friday’s intra-day trade on heavy volumes amid expectation of higher budgetary allocation for Indian Railways in 2024-25 (FY24-25).

An outlay of Rs 2.4 trillion for the financial year 2023-24 (FY23-24) was made by Finance Minister Nirmala Sitharaman for the railways. According to reports, the interim budget FY24-25 will likely allocate Rs 2.8-3 trillion for the railways to keep its capex momentum intact. Rail Vikas Nigam (RVNL), Indian Railway Finance Corporation (IRFC), IRCON International, NBCC (India), RailTel Corporation of India, and Texmaco Rail & Engineering were up in the range of 5 percent to 18 percent. In comparison, the S&P BSE Sensex was up 0.65 percent at 71,653 at 11:59 AM.

Among individual stocks, RVNL zoomed 18 percent to Rs 288.65 on the back of a two-fold jump in trading volumes. A combined 126 million equity shares of the company changed hands on the NSE and BSE. RVNL was incorporated to bridge the infrastructure deficit on Indian Railways. RVNL generally works on a turnkey basis and undertakes the full cycle of project development from conceptualization to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management, etc. IRFC hit a new high of Rs 160.34, as it rallied 10 percent in intra-day trade today. In the past six trading days, the stock price of state-owned financial institutions has zoomed 50 percent. While, in the past six months, it skyrocketed 389 percent.

A sharp rally in the stock price of the company has seen the market capitalization (market cap) of IRFC cross the Rs 2 trillion mark for the first time ever. Currently, IRFC’s market cap stands at Rs 2.10 trillion; the BSE data shows. IRFC was set up as the dedicated funding arm of the Indian Railways (IR) for mobilizing funds from domestic as well as overseas Capital Markets. IRFC has played a significant role in supporting the expansion of the Indian Railways and related entities by financing a significant proportion of its annual plan outlay. It aims to be one of the leading Financial Service Companies in the country, for raising funds from the capital market at a competitive cost for Railway infrastructure augmentation, duly ensuring that the Corporation makes optimum profits from its operations.

Indian Railways are now poised to take a transformational leap in the Amrit Kaal of the post-Independence period and fulfill the vision of ‘Viksit Bharat’ which includes modern, faster, available on-demand passenger services and facilities, a substantial share in freight cargo with ancillary services in logistics parks and domestic industry driven rail infrastructure of highest standards. A record capex target of Rs 2.60 trillion in 2023-24, up 65.6 percent when compared to 2022-23, is targeted to initiate the necessary changes for this vision, across the entire network. Achieving India’s commitment of net zero carbon by 2070 will rest in part on more rail-bound passenger and cargo movement, IRFC said in its FY23 annual report.

Over the years, IRFC’s contributions to the Indian Railway sector have been substantial, with cumulative funding surpassing the significant milestone of Rs 5.5 trillion. This remarkable achievement is further bolstered by an impressive Asset Under Management (AUM) figure of Rs 4.66 trillion as of March 31, 2023. With a focused approach aimed at supporting the expansion and modernization of Indian Railways, IRFC remains committed to making the railway network future-ready. IRFC’s role in augmenting the annual plan outlay of Indian Railways by mobilizing funds from diverse financial sources, forming part of Extra Budgetary Resources (EBR) funding, has been commendable. With its robust financial position, unwavering commitment, and strategic vision, IRFC is well-positioned to drive the future growth and success of the Indian Railways and support infrastructure, ultimately fostering progress and prosperity for the nation, the company said.

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Aarti Ind jumps 13% in 2 days on winning a long-term contract worth Rs 6K cr

Shares of Aarti Industries (AIL) rose 8 percent on BSE to Rs 658.70 in Friday’s intra-day trade amid heavy volumes.

The average trading volumes on the counter jumped over four-fold. A combined 6.04 million equity shares of the company changed hands on the NSE and BSE.

In the past two days, the stock of the specialty chemicals company has surged 13 percent after it secured a four-year supply contract worth over Rs 6,000 crore with a multinational conglomerate.

At 10:42 am, AIL was up 7 percent at Rs 655.20 as compared to a 0.94 percent rise in the S&P BSE Sensex.

The stock had hit a 52-week high of Rs 661.40 on December 29, 2023.

AIL has signed a long-term agreement with a multinational conglomerate for the supply of a niche specialty chemical. The contract is expected to generate revenue of over Rs 6,000 crore for the company.

The product has been an integral part of AIL’s long-term growth strategy and its volume has consistently increased over the past 4-5 years, it said.

AIL’s ongoing capital expenditure programs will meet the contract requirements and hence it does not see any additional capital expenditure for this contract.

Earlier on December 27, AIL announced that it had entered into a long-term supply contract with a global agrochem major for a niche agrochemical intermediate.

The contract offers AIL a revenue potential of nearly Rs 3,000 crore for 9 years with the contract supplies commencing from the current fiscal year, the company said.

This agrochemical intermediate serves as a crucial input component for a widely used herbicide applied in diverse food and cash crops (such as corn, soybean, cotton, sugarcane, and sunflower).

The global market for this herbicide is large and steadily growing, it added.

Meanwhile, the management in the Q2 earnings call said they maintain optimism about potential demand revival in the end-use segments such as agrochemical, polymer additives, and other discretionary applications going forward.

“We expect the worst to be over in H1FY24 and anticipate that it will take a few more quarters for normalized demand across various end segments/product lines. Thus we expect consequentially better performance in H2FY24 and foresee FY25 to be a normalizing year given the current pace of recovery,” it said.