Investing in companies with substantial order books offers a degree of future revenue visibility, akin to planting a seed in fertile ground. In the dynamic Indian railway sector, significant government focus on modernization and infrastructure development has led to record-breaking orders for key players. This article examines five major railway-related stocks with the largest order books as of the close of FY25, highlighting their potential and the challenges they face. These companies focus on manufacturing, construction, or undertaking large railway projects, offering insight into how India’s ambitious rail plans are moving from policy to tangible execution.
Contents
Key Takeaways:
- Five railway companies stand out with the largest order books as of FY25-end: RVNL, BEML, Ircon International, Titagarh Rail Systems, and RITES.
- A large order book signifies future revenue potential and business momentum.
- These companies are diversifying beyond traditional railway work into areas like metro, roads, energy, and defense.
- Despite strong order books, companies face challenges like execution risks, margin pressures, supply chain issues, and valuation concerns.
- Investors should consider valuation, cash flow, and execution history alongside order book size.
Deep Dive: India’s Top Railway Order Book Holders
The Indian government’s push for upgrading and expanding the rail network, improving freight efficiency, and developing urban transport systems is creating significant opportunities for companies in the sector. Here’s a look at the five firms with the largest order books at the end of the last fiscal year:
Rail Vikas Nigam (RVNL)
Established in 2003, Rail Vikas Nigam is a public sector undertaking (PSU) primarily focused on implementing rail infrastructure projects assigned by the Ministry of Railways. Its work spans doubling tracks, gauge conversion, new lines, electrification, bridges, workshops, and production units. RVNL also shares freight revenue with Indian Railways.
As of April 1, 2025, RVNL held an impressive order book totaling approximately ₹1 lakh crore. This included around ₹45,000 crore from Indian Railways’ allocated projects and a substantial ₹55,000 crore from competitive bids. While allocated railway orders have decreased compared to previous years, RVNL is actively pursuing new bids across various infrastructure sectors to compensate. Around 45% of its current order book remains directly railway-related.
To mitigate reliance on traditional Engineering, Procurement, and Construction (EPC) activities and counter margin pressures from competitive bidding, RVNL is diversifying. New ventures include metro operations, road construction, energy projects, and data centers. The company aims to achieve a turnover of ₹21,000 crore in FY26 and is expanding internationally, targeting a two to three times increase from the current ₹4,000 crore in overseas orders. Future opportunities like the Vande Bharat train joint venture and forays into battery storage, solar, and nuclear energy could contribute revenue by FY27. RVNL is transforming into a diversified infrastructure player, offering encouraging growth prospects, though execution risks and potential margin compression require close monitoring.
In the last year, RVNL’s share price declined by 31.2%.
Rail Vikas Nigam (RVNL) share price chart performance over the last one year, showing a significant decline.
BEML
BEML is a diversified heavy equipment manufacturer serving the mining, construction, defense, and rail sectors. Its railway products include metro coaches and coaches for Indian Railways.
As of April 1, 2025, BEML’s order book stood between ₹22,000 crore and ₹23,000 crore, with ₹6,800 crore added in FY25, representing a 28% growth year-over-year. Rail and Metro segments account for roughly 60% of the order book, with mining and defense contributing the remaining 40%. The company targets a 20% Compound Annual Growth Rate (CAGR) and aims to double its order book in the coming years. Increased Rail and Metro orders are anticipated from projects like Bangalore Metro, LHB coach deliveries, and potential large orders from MRVC. New facilities in Bangalore and Bhopal are set to increase production capacity to 750-800 cars per annum within two to three years.
In the defense sector, BEML expects strong execution of high-mobility vehicle orders. The company is also shifting towards delivering system-level solutions and growing its “sustenance” business (spares and services), which already contributes 26% of revenue and is projected to exceed 30%. BEML is focused on improving margins by 1.5% through cost control, better product mix, and increased systems business. While prospects are positive, challenges include delays in cash collection from metro contracts, inventory management, quality control in forging/casting, skill deficiencies, and technology adoption. BEML plans significant capital expenditure for expansion, including developing high-speed and aluminum train technologies.
BEML’s future relies on timely project implementation, successful diversification, and overcoming operational hurdles. Its share price was down 12.3% over the past year.
Ircon International
Founded in 1976 as a railway construction company, Ircon International has evolved into an integrated engineering and construction PSU specializing in large, complex infrastructure projects across railways, highways, and other sectors.
Ircon International’s order book on April 1, 2025, was ₹20,500 crore. Around 58% of this came from competitive bidding and 42% from nomination orders. The domestic market accounts for nearly 90% of orders, with the rest from international projects. The railways business remains the primary revenue driver, contributing 70-75%.
In FY25, Ircon reported revenue of ₹11,131 crore and Profit After Tax (PAT) of ₹728 crore. Margins were impacted by project losses (like DFCC and Chennai Metro) and increased competition. For FY26, turnover is expected to be comparable to FY25, but margins might slightly decrease. Ircon is expanding into new areas like the Kavach safety system (securing initial orders totaling over ₹400 crore), signaling diagnostics, hydropower, and building construction. Order inflows in FY25 were ₹2,600 crore, with significant additions already in the first two months of FY26. Ircon maintains an international presence, with ongoing work in Algeria and Myanmar and completed projects in Sri Lanka, Bangladesh, and Nepal.
Challenges for Ircon include cash flow lags, execution risks, margin pressures from competitive bidding, and capital blockages in road/coal linkage projects. The company aims to monetize assets to address some of these issues, but faces delays in government approvals. Success in diversification will be key, but the competitive market demands disciplined execution and margin maintenance.
Over the past year, Ircon International’s share price saw a significant drop of 40.2%.
Ircon International share price chart performance over the last one year, showing a steep decline.
Investors interested in infrastructure development might also find value in exploring related sectors. Read our analysis on one sector riding India’s massive Jal Jeevan Mission hit a hurdle. Is this an opportunity to buy into it?
Titagarh Rail Systems
Founded in 1997, Titagarh Rail Systems is primarily known for manufacturing and selling freight wagons but has diversified into passenger coaches, metro trains, train electricals, steel castings, and even shipbuilding. It serves both domestic and export markets.
As of April 1, 2025, Titagarh Rail Systems’ standalone order book was approximately ₹11,200 crore, supplemented by its share in joint venture orders totaling ₹13,326 crore. Around 70% of its revenue comes from the railway sector, including freight wagons, metro coaches, and Vande Bharat trains.
In FY25, Titagarh achieved a record production of 9,431 wagons. Despite past delays due to wheelset shortages, supply is expected to normalize from June 2025. The company’s wagon production capacity is 12,000 units per annum, with a revenue potential of ₹4,000-₹4,500 crore. The passenger segment is a key growth driver, with production scaling up significantly in FY26 and potentially doubling by FY27, driven by major projects like Ahmedabad, Surat, and Bangalore Metro, and Vande Bharat. The propulsion business is also expanding rapidly. Titagarh is further venturing into safety and signaling systems and developing a new shipyard facility for shipbuilding.
Challenges include ongoing issues with wheelset supplies, delays in importing metro materials, margin fluctuations in the passenger segment, and potential losses from its Italian subsidiary. FY26 and FY27 are seen as pivotal years as Titagarh transitions from a wagon-focused business to a more diversified, high-value portfolio. Successful execution, capacity ramp-up, and supply chain resilience will be critical for future performance.
Over the past year, Titagarh Rail Systems’ share price experienced a significant decline of 48.1%.
RITES
Established in 1974, RITES is a leading public sector enterprise in transport consultancy and engineering in India. It offers diverse services globally and acts as the export arm of Indian Railways for rolling stock (excluding specific countries).
On April 1, 2025, RITES reported a record order book of ₹8,900 crore. This included ₹1,350 crore in export orders, ₹3,000 crore in consultancy orders, and approximately ₹4,200 crore in turnkey orders. Roughly 70% of revenue is generated from railways, with the remainder from roads, urban transport, ports, and other segments.
The company targets 20% revenue growth in FY26, with maintained EBITDA margins around 20% and PAT margins of 15-16%. Management is focused on efficiently executing the large order book to translate it into revenue. Exports are expected to rebound in FY26 with deliveries to Mozambique and Bangladesh. RITES aims for consistent export and domestic order wins. It continues to grow its international consultancy presence, particularly in Africa, Southeast Asia, Latin America, and the Middle East. Maintaining a low-capex model, RITES primarily remains a consultancy player, even in turnkey projects.
Margin pressures from competition and tough negotiations are notable. The quality assurance business is stabilizing but is still working to regain previous profit levels. RITES aims for record revenues and profits in the coming years. Its prospects are solid, but success hinges on execution discipline, margin protection, and managing its order mix effectively.
RITES’ share price fell by 27.8% over the past year.
RITES share price chart performance over the last one year, showing a decline.
Beyond the railway sector, the defense sector also presents interesting opportunities, particularly in areas like space-based technologies. Consider exploring 4 space-based defence stocks to keep on your radar.
Conclusion: Beyond the Order Book
While the substantial order books of these railway companies signal strong business momentum and significant future revenue potential driven by India’s infrastructure push, investors must look deeper. Recent reports from institutions like Kotak Institutional Equities highlight potential valuation gaps in some railway PSUs, where premium valuations might be driven by factors beyond core operational growth. Incomplete visibility on major new capital expenditure cycles and the pace of earnings acceleration mean that stock price performance may not always perfectly mirror order book expansion in the long term.
Nevertheless, a healthy order book remains a vital indicator of a company’s trajectory and potential. For a comprehensive investment decision, it’s crucial to evaluate these companies using multiple criteria, including valuation multiples, debt levels, cash flows, and their historical execution track record, in addition to the size and quality of their order pipeline. A balanced approach, considering both the exciting growth prospects indicated by large order books and the inherent risks and financial fundamentals, is essential for navigating investments in the railway sector.
