Rail Stocks Slump Ahead of Budget; Titagarh Wagons Sinks 8%

Railway stocks came under sharp selling pressure ahead of Suresh Prabhu's first Budget announcement on Thursday.

Titagarh Wagons closed 6.2 per cent lower at Rs 580.25, while electronic safety equipment supplier Kernex Microsystems shed 5 per cent to close at Rs 46.75.

Hind Rectifiers ended 4.9 per cent lower, while Simplex Casting closed 1.5 per cent lower. State-run BEML and Texmaco also closed lower.

Rail stocks underperformed the broader Sensex and Nifty indices, which closed flat on Wednesday.

Most rail stocks have run up sharply, so Wednesday's selling could be on account of profit taking ahead Rail Budget, analyst said.

Rail stocks have rallied on hopes that the government's focus on infrastructure will lead to higher private investment in railways. The government is expected to make announcements about improving IT infrastructure and rail safety system as well.

"It will be a solid Budget, working towards strengthening the infrastructure," said LV Raju, managing director at Kernex Microsystem.

Over the last one month, Titagarh Wagons shares have rallied over 60 per cent; they have surged over 500 per cent in the last one year. BEML, which supplies equipment like rail coaches, has rallied over 350 per cent in last one year.