Rail stocks mixed ahead of Rail Budget, Prabhu to focus on attracting investment

Rail stocks are mixed just ahead of the Rail Budget to be presented by Suresh Prabhu at 12 pm today.

Stocks like Hind Rectifiers and Titagarh Wagons are up 1-2 percent while Kalindee Rail , Texmaco and Kernex Micro are down 2-4 percent intraday on Thursday.

A lot of suggestions from the Prime Minister’s office have been incorporated in the Budget and the focus is likely to be on attracting investment, modernisation of trains through Wifi and transparency in railway systems.

The budget will signal the direction of long-term reforms needed to revamp the world’s fourth-largest rail network, Railway Minister Suresh Prabhu said today.

“The budget will set the direction of long and difficult road of reform,” Suresh Prabhu told state-run broadcaster DD News ahead of his budget presentation.

India’s decrepit state-run train services stand to receive at least a 25 percent boost in investment to over $9 billion, funded solely by falling fuel costs, according to officials familiar with the railway budget.

While a fare hike is unlikely across the board, acess for cleanliness cannot be ruled out.

Prabhu is likely to unravel his grand plans of how to decrease the cross-subsidy for passenger service from freight earnings which is touching Rs 24,000 crore and the steps to increase goods transportation share in the national transporter with or without hiking fares. For 10 years before 2012-13 there was no increase in rail fares.

Former Railway Minister and Trinamool Congress leader Dinesh Trivedi had made an across-the-board hike in 2012-2013 but was made to roll back the hike in second and sleeper class categories. Since then there have been hikes in passenger fares.

Before the first Railway budget of the Modi government in July last, fares were increased by 14.2 percent and freight rates by 6.5 percent.

With inputs from Agencies