Indian Railways Increase Capex; Stocks Fall

Mayank Mehta
24 Feb, 2010
New York City

Indian Railways proposed a capital spending to increase 2.7% in the next fiscal year. Freight handled is expected to increased 6% and passenger revenues to increase 7%. The railways proposed to pay dividend of $1.2 billion to the central government.

[R]5:00 PM Mumbai, 7:30 AM New York – Indian Railways proposed a capital spending to increase 2.7% in the next fiscal year. Freight handled is expected to increased 6% and passenger revenues to increase 7%. The railways proposed to pay dividend of $1.2 billion to the central government.[/R]

The Sensex index in India decreased 30.35 or 0.19% to 16,255.97 and CNX Nifty index fell 11.45 or 0.24% to 4,858.60. Among the Sensex 30 stocks, 11 rose and 19 fell.

On BSE trading, 930 stocks advanced, 1,847 declined and 74 were unchanged. Realty stocks edged higher. But consumer durables stocks fell. Reliance Industries rose.

The Finance Minster may project a lower fiscal deficit for 2010-11 based on higher revenue projections due to economic rebound.

Rail Minister Mamata Banerjee announced a populist rail budget for fiscal year beginning April 1. The Rail Minister kept passenger fares and freight rates unchanged. The freight rate for food grains and kerosene was cut by Rs 100 per wagon to cut the food price inflation.

Railways wagon makers closed sharply lower after the rail budget did not increase wagon orders for the next fiscal year from the current level of 18,000.

Titagarh Wagons Ltd declined 6.6% to Rs 378.05 and Kalindee Rail Nirman Ltd dropped 5% to Rs 183.80.

DB Realty closed at Rs 424.70, a discount of 9.25% to its initial public offering price of Rs 468. Emmbi Polyarns closed at Rs 31, a discount of 31.11% from its initial public offer price of Rs 45.

Cements stocks were mixed after the Rail Minister kept freight rate unchanged in the Rail Budget for 2010-2011.

[Railways Budget

Indian Railways proposed a capital spending to increase 2.7% in the next fiscal year.

Freight handled is expected to increased 6% and passenger revenues to increase 7%. The railways proposed to pay dividend of $1.2 billion to the central government.

Freight loading in the next fiscal year is expected to increase 54 million tons to 944 million tons and number of passengers transported is expected to increase 5.3%.

Gross traffic receipt is expected to increase Rs 6,490 crore to Rs 94,765 crore. Railways also proposed to pay dividend of Rs 6,608 crore to the central government.

The railways kept its estimate of new wagon acquisition to 18,000 and allocated a total of Rs 41,426 crore an increase of Rs 1,142 crore to capital expenditure.

The railways plan to extend the network by 1,021 kilometers in the next fiscal year and introduce 54 new train services.

Gainers & Losers

Bajaj Electricals Limited advanced 2.5% to Rs 182.00.

Bata India Limited rose 0.4% to Rs 186.20 after the company announced that the consolidated net profit for the year ended December 31, 2009 rose to Rs 62.58 crore from Rs 59.06 crore in the previous year. Net sales increased to Rs 1,090.18 crore from Rs 983.60 crore in the year ago.

Bafna Pharmaceuticals Limited fell 1.5% to Rs 28.25 pharmaceutical formulations of betalactum and non-betalactum products maker received UK regulatory approval for its product clarithromycin 250 mg.

Fame India Limited dropped 4.9% to Rs 86.25.

Gateway Distriparks Ltd added 0.9% to Rs 130.05 after a foreign fund bought 0.59% stake in the logistics firm.

Lanco Infratech Limited fell 2.2% to Rs 45.60 after the promoter group company pledged additional 21.50 lakh shares representing 0.89% of the equity capital of the firm.

McNally Bharat Engineering Co. Limited rose 0.1% to Rs 250.00 after the company secured an order of Rs 5.80 crore.

Nirma Limited fell 4.0% to Rs 169.05 and four bulk trades in stocks were completed on the NSE and the BSE trading.

Parenteral Drugs (India) Limited rose 0.7% to Rs 197.10 after the company signed a memorandum of understanding with Taurus Export Processing Zone, a Kenya based pharmaceutical company to sell drugs in Africa.

Rural Electrification Corporation Limited rose 4.9% to Rs 223.70 after the company received more than three times offer for its secondary offering on the last day of subscription today.

Saksoft Limited fell 0.1% to Rs 44.50.

Steel Strips Wheels Limited fell 2.0% to Rs 97.70 and the company was selected as a key part supplier for its new vehicles in India beginning 2011.