From RVNL to IRFC - Here's why railway stocks are extending their momentum on Monday

The IMEC will comprise two corridors: The east corridor which will connect India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe.

It will include a railway line, that upon completion, will provide a cross-border ship-to-rail transit network to supplement existing maritime and road transport duties and enable goods and services to transit between India, UAE, Saudi Arabia, Israel and Europe.

Participants also intend to enable the laying of cable for electricity and digital connectivity as well as pipes for clean hydrogen export.

However, these are just announcements and no company has directly been awarded any specific contract for this corridor.

IRCON International specialises in the construction of MRTS and has a presence in African countries like Mozambique and Ethiopia. While RVNL undertakes projects related to railway infrastructure, IRFC is a financier for the railways and these companies.

Shares of IRFC have now crossed the market capitalisation of Rs 1 lakh crore.

“Currently there is a huge momentum as far as the defence and railway companies are concerned. However, as far as investors and valuations are concerned, maybe we have run ahead of the curve," Krishna Kumar Karwa of Emkay Global told CNBC-TV18 in an interaction.

"So, maybe there could be some consolidation, some price correction and so investors should be careful about investing in this segment of the market. I am not saying that opportunities are not there. I agree that the valuations, possibly are discounting maybe not even FY25-FY26, and my rule of thumb is that if you believe that the best discounted three years forward, then you should take some money off the table," he added.

Shares of JSPL which supplies rails are also trading with gains of 1 percent, while L&T, which has a significant presence in the Middle East is trading with gains of 0.7 percent and at a record high.