Rail Reforms and enthusiastic market
With every pep talk driving rail stocks higher and higher every now and then, events like Rail Budget, new railway minister or even investors meeting called by ministries are just proving to be catalyst for this segment. Market had been observing these rallies ever since National General Election portrayed clear majority for NDA government and rest is history for all of us. New government and every pep talk are reasons to celebrate but there is caveat when valuing these stocks. For instance wagon manufacturing companies which is been observed to follow patterns of government policies had seen its worst years in last couple of years. Most of them had been booking losses due to fewer volumes of business and culprit maybe policy paralysis in last two –three years of previous government. Fundamentals are scattered for this segment and comparing companies would be injustice in some way or other. It is also observed that sales, profits and margin are very cyclical in nature and it’...
