The Railway Budget 2010-11 gets thumbs up on putting in place a Vision 2020 for setting up 1,000 km lines per year, a five-fold jump from the average of the last 50 years. Even if one assumes a 40-50% delivery, it still means huge opportunities for companies in this space and transformation for Indian Railways. Various initiatives involving the private sector through the PPP route is a major step in the right direction. New players with deep pockets may enter this segment in the medium term.

Immediate performance of Indian Railways just manages to beat conservative budget estimates set last year, marginally. It seems like railway stocks see few near-term benefits, possibly given the financial constraints of railways and have shed any gains made in recent weeks. Some are even down heavily by 5-8%.

Overall, Freight tariff has not been increased. Certain agri-stocks take heart from the fact that freight has been cut for food grains by Rs100 per wagon.