Railway Stocks up 5%; IRCTC, IRFC Get ‘Navratna’ Status

Railway PSU stocks soared by 5% on March 4 after Indian Railway Catering and Tourism Corporation Ltd (IRCTC) and Indian Railway Finance Corporation Ltd (IRFC) were designated with the status of Navratna company. With this move, close to seven listed railway PSU companies have been allocated 'Navratna' status.

For the grant of Navratna status, central government considers Central Public Sector Enterprises (CPSEs), which are Miniratna I, Schedule ‘A’ and have obtained ‘excellent’ or ‘very good’ MOU rating in three of the last five years and having a composite score of 60 or above in six selected performance indicators.

The centre takes six parameters into consideration including net profit to net worth, manpower cost to total cost of production, cost of services, PBDIT to capital employed, PBIT to turnover, earning per share, inter sectoral performance.

On March 3 shares of Rail Vikas Nigam Ltd (RVNL) were up by 4.85% to ₹339.25, wherein its market capitalisation stood near ₹71,000 crore-mark. IRCON International Ltd soared by 4.09% to ₹146.25.

IDBI Capital gave a ‘sell’ rating to IRCON International by keeping a target price of ₹143. The brokerage said that the company reported poor Q3 results. Keeping a target price of ₹152, Antique Stock Broking gave a ‘hold’ rating on the stock. However, it gave a ‘sell’ tag for RVNL with a target price of ₹215.

Shares of IRFC rallied by 3.69% to ₹115.25 on March 3. The company's market capitalisation went above ₹1.5 lakh crore. IRCTC and Container Corporation of India Ltd were up by a percent in the early trade. Meanwhile, RITES Ltd rose by 2.65% at ₹203.70 apiece.

IDBI Capital gave a ‘buy’ rating to IRCTC by setting a target price of ₹870. IRCTC reported steady Q3 earnings as net profit zoomed past 14% at ₹341 crore.