Mumbai: Stocks of most of the companies that derive substantial revenues from operations related to the railways crashed by as much as 8.8% on Thursday as market players were disappointed by the absence of specific details in the Railway Budget about the projects the ministry will undertake during the fiscal 2016-17. The slide was also attributed to analysts’ fears about higher expenses by Indian Railways as the country’s largest employer will have to pay more salaries in line with the recommendations of the seventh pay commission.

On Thursday, among the leading stocks with exposure to the railways, Texmaco Rail crashed 8.8% to Rs 120 while Titagarh Wagons lost 8.4% to Rs 113 and Kalindee Rail closed 8% lower. In the broader market, the sensex lost 0.5% (113 points) to close at 22,976, close to its 52-week closing low of 22,952, while nifty closed at 6,971, a 52-week low. In the forex market, the rupee closed at 68.71to a dollar, just a tad off its all-time low of 68.84, recorded in August 2013.

According to analysts, the sharp slide in most railways stocks was because the ministry’s operating ratio of 92% in the current fiscal is expected to be higher in the next fiscal due to higher salary and bonus outgo, which may weigh on its capacity to spend on upgrade and new projects. In turn, this will mean lower order inflows for companies invol ved in projects for railways, they said.

Some market players, however, said the budget was growth-oriented with long-term term positives. “Traders usually look at short term gains. Since there were not much to gain in the short term, hence the sell-off in these stocks,” said an investment analyst.

In the overall market, of the 30 constituents in the sensex, 21ended lower and 9 higher. ONGC, Sun Pharma, HDFC, Coal India and Cipla were among the gainers. Power, realty, capital goods, banking, auto, IT, technology, oil and gas and consumer durables fell up to 2%.



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