RailTel shares hit 52-week high as it targets big orders from Railways for anti-collision tech

Stock market news: Shares of the state-run RailTel Corporation of India Ltd. hit a 52-week high of Rs 183.95 apiece on Monday (August 28, 2023) after the company's chairman and managing director, Sanjai Kumar, said in an investor call on Friday (August 25) that the company was eyeing Rs 4,000–5,000 crore worth of orders related to LTE and Kavach from the railway ministry.

At the time of writing this report, the company's share was hovering around its 52-week high, 10.85 per cent higher at Rs 184.40. The spurt in the volume of the share was more than 1.65 times.

Zee Business Research Analyst Arman Nahar gave Railtel stock a 'buy' call. For the 12-month target, he gave the share a target price of Rs 200. He says the company can expect good orders in the coming months.

What RailTel chairman says

In an investor call on Friday, the RailTel chairman says the government's total size of projects—LTE and Kavach—over the next five years could be around Rs 30,000 crore, and the revenue that RailTel was eyeing from the railway projects is at least Rs 4,000–Rs 5,000 crore.

Railway stocks in focus

ZeeBiz analyst Nahar says that the government is keen to improve the standard of Indian Railways by making changes in railway infrastructure, introducing new trains, and modernising railway stations.

He says that the stocks that will remain in focus amid the development of railway infrastructure are- RailTel, Titagarh Rail System, Texmaco Rail, Rites, RVNL, and BEML.

Why railway stocks are in focus (As per ZeeBiz research)

• The government has a special focus on improving the standards of Indian Railways
• The government is keen to develop the railways according to international standards.
• The government wants to develop railway stations at the same level as airports.
• The government has issued a list of 508 railway stations that will be modified.
• The ministry is uplifting the safety standards of railways and has anti-collision projects such as Kavach and LTE worth about Rs 30,000 crores. 
• The government will give orders for 800 new Vande Bharat trains till 2030.
• The government can spend a total of Rs 2 lakh crore on the construction and maintenance of the Vande Bharat train.