5 Best Railway Penny Stocks To Invest
Introduction to Railway Penny Stocks
Railway penny stocks refer to the stocks of companies that are part of the railways. These low-priced shares have a great growth potential since railways play a significant role in the development of a country.
Overview of Indian Railway Penny Stocks
The Indian Railways, one of the world’s largest rail networks, has always played a vital role in the economy and the nation’s transportation infrastructure.
Fuelled by the ₹2.55 lakh crore budget impetus allocated to the Indian Railways for the financial year 2024-2025, the Indian railway sector penny stocks have gained the trust of customers and have recorded significant growth.
The Popularity of Indian Railway Penny Stocks
Railway penny stocks are priced between ₹1 to ₹100. The number of penny railway stocks that are listed on the National Stock Exchange (NSE) is limited but the demand for railway penny stocks never seems to abate.
The railway sector penny stocks are popular as the Indian Railways is a cash-rich business with low operating costs. Since the railway sector in India is a monopoly, there can be no competitors.
At present, there are no railway penny stocks in India as their values have risen well above the ₹100 threshold. Investors can look at railway ancillary stocks if they want to invest in penny stocks to foray into the stock market and experience spectacular gains.
Top 5 Indian Railway Penny Stocks List
With ongoing advancements in the railway sector, an informed and wise investment in these stocks will guarantee great profits.
Given below are the top 5 Indian railway penny stocks that are listed in the NSE:
1. Indian Railway Catering Tourism Corporation Ltd (IRCTC):
The government-owned company was established on 27th September 1999 to upgrade and manage railway services such as catering, online ticketing, tourism, and packaged drinking water (Rail Neer).
It is one of the largest railway catering companies and has a Piotroski F-Score of 4 as of March 2023. This mid-cap listed stock is considered one of the best railway Public Sector Undertaking (PSU) stocks with a net profit of ₹1,354.01cr and Net cash flow (CF) of ₹810.12cr. The 52-week high-low value of IRCTC stocks is ₹1049 and ₹564.55. The face value of the stock is ₹2 and the earnings per share (EPS) is ₹13.81.
2. Bharat Earth Movers Limited (BEML)
This PSU railway stock company manufactures heavy equipment for mining, defence and construction purposes. The company also manufactures railway rolling stock such as coaches, wagons and locomotives and has a Piotroski F-Score of 6.
BEML is the second-largest earthmoving manufacturing company in Asia with a net profit of ₹278.60 crores. The stocks of the company, which was established in 1964 in Bangalore, have a 52-week high-low value between ₹ 4139.4 and ₹1184.
The face value is ₹10 and the expected earnings per share is ₹43.92. The company’s Net cash flow (CF) is ₹2084.72 million or ₹20847.2 crore.
3. Titagarh Wagons Limited (TWL)
Founded in 1997, the company ranks as the second-largest producer of freight wagons in India. It has a Piotroski F-Score of 7 and a net profit of ₹259 cr. The private railway company is known for its freight wagons and passenger coaches and has a net cash flow of ₹4.18 crores.
The Kolkata-based company’s stocks are considered one of the best in the country and have a face value of ₹2, with the earnings per share standing at ₹20.31. The net profit of TWL stands at 1811.80 million or 181.18 crore. The 52-week high-low value lies between ₹1284.9 and ₹274.
4. Container Corporation of India Limited (CONCOR)
The autonomous PSU under the Ministry of Railways was established in 1988 and has a net profit of ₹15631.90 million or ₹1563.19 crore and a net cash flow of ₹412.00 million or ₹41.2 crore.
The mid-cap railway penny stocks listed in NSE have a 52-week high-low value between ₹1027.5 and ₹568.85 and a Piotroski F-Score of 7. The company provides comprehensive logistics solutions and the stocks have a face value of ₹5, and earnings per share of ₹20.07.
5. Indian Railway Finance Corporation (IRFC):
The exclusive financing segment of Indian Railways, established in the year 1986, focuses on leasing coaches to the railways. It has a Piotroski F-Score of 5, a 52-week high-low value between ₹192.8 and 27.2 and a net profit of ₹6337.01 crores.
The net CF is ₹59.54 crores and the face value and earnings per share of the IRFC stocks are ₹10 and ₹4.63 respectively.
Here is a quick overview of the various pointers of the Indian railway penny stocks list:
| IRCTC | BEML | TWL | CONCOR | IRFC |
Dividend Yield (%) | 0.61 | 0.36 | 0.061 | 1.27 | 1.07 |
Return on Equity (ROE) (%) | 45.4 | 6.3 | 13.9 | 10.6 | 14.7 |
Return on Capital Employee (ROCE) (%)
| 59.2 | 10.5 | 17.6 | 13.7 | 5.32 |
Market Cap (in crore) | ₹70,452 | ₹11,535 | ₹11,202 | ₹52,884 | ₹1,62,376 |
Book Value | ₹35.6 | ₹569 | ₹103 | ₹190 | ₹36.9 |
Total Debt (in crore) | ₹67 | ₹391 | ₹362 | ₹821 | ₹4,06,443 |
Debt to Equity | 0.02 | 0.17 | 0.26 | 0.07 | 8.52 |
Stocks P/E | 63.3 | 63.2
| 43.9 | 43.3 | 30.4 |
Note: This blog is only for informational purposes; we are not SEBI registered, and we are not promoting any company or pushing you to buy stocks of a specific company; please do your research before purchasing the stocks.
Wrapping Up
Railway sector penny stocks are a great addition to your investment portfolio and investment opportunity. However, there is always an underlying element of risk if you invest in these stocks without having all the information or understanding their low liquidity.
Given above is an overview of the railway penny stocks list with price. However, irrespective of whether you are an experienced investor or a newcomer, it is advisable to conduct in-depth research which can provide valuable investment insights.
You can also consult the financial experts at LenDenClub for a better understanding of this investment opportunity.
Frequently Asked Questions
1. How can you decide if the railway company’s growth prospects would look good in the future?
To predict the railway company’s future growth, it is a good idea to compare its order book with the current market cap. A large order book against a small market cap indicates great future growth and profits while the opposite scenario reflects overvaluation.
2. What are the main benefits of investing in railway sector penny stocks?
Investing in railway sector penny stocks is an excellent long-term investment with the chance to get a steady stream of income through dividends. The governmental support and the increasing demand for railway services in India are expected to increase the prices of railway stocks in the future. Investing in railway penny stocks is a great way to diversify your investment portfolio.
3. What are the avenues through which an individual can invest in railway penny stocks?
Individuals who are looking to invest in the best railway penny stocks can do so through several avenues. You can choose your preferred railway stock from the Indian railway penny stocks list or by buying mutual funds or exchange-traded funds (ETFs) that have invested in these railway stocks.
Team LenDenClub
LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.
