Counters of around a dozen small and mid-sized companies on the Bombay Stock Exchange did brisk business on Monday, following railway minister Lalu Prasad’s announcement in the Railway Budget of a huge capital expenditure and upgradation plan. “These firms are expected to do well with new orders (arising from this),” said an analyst with a Mumbai-based brokerage who tracks some of these companies,and who did not wish to be identified.
The stocks of Kernex Microsystem, Gateway Distriparks, Integra Hindustan Control, Hindustan Rectifiers, Stone India, Areva T&D, Kalindee Rail Nirman and Texmaco, all did brisk business, and barring the last two, all others ended Monday with gains. While some of the firms, such as Kalindee Rail Nirman, derive a huge portion of their revenue from rail equipment, others, such as Areva T&D, do not. With Indian Railways increasing their capital expenditure, many of these stocks might see faster growth in the future, according to analysts.
Most of these firms do not figure on the radar of large brokerages, primarily because of their low market capitalisation. The collective market capitalisation of these firms is around Rs8,000 crore and a few of them are traded under the “trade to trade” category on BSE, meaning that buyers have to take delivery of stocks. Investors, too, are not aware of several of these companies.
Hind Rectifiers manufactures rectifier equipment, and semi-conductor devices for trains. Its R&D department is recognized by the department of science and technology, and is now in the process of developing traction rectifiers for diesel locomotives.
Texmaco, originally set up to make cotton-spinning machinery, now makes railway wagons, industrial boilers, road rollers, hydraulic steel structures, pressure vessels and heat exchangers. Hyderabad-based Kernex Microsystem India, listed in November 2005, manufactures auto-driving devices and special signalling systems. It is setting up a manufacturing facility in a hardware park located near the new, under-construction Hyderabad international airport.
Gateway Distriparks Ltd, which provides logistics solutions, entered into an agreement with Container Corporation of India Ltd in September 2005 to work jointly towards business development and to facilitate trade by providing rail connectively to various gateway ports. Kalindee Rail Nirman is in the business of manufacture and installation of signalling and telecommunication equipment and execution of gauge-conversion projects.
Integra Hindustan Control, promoted by Asea Brown Boveri and Integra Holding, Switzerland, manufactures railway signalling products and systems. The company has a marketing arrangement with Asea Brown Boveri. It is a major supplier of signalling products to Konkan Railway Corporation.
Now, thanks to Indian Railway’s expansion and modernisation initiatives, these firms, and several others in the same business, stand to benefit.