Small-cap railway stock edges higher after THIS order update. Do you own?

Shares of small-cap railway stock K&R Rail Engineering surged 4 percent in intra-day trading on Friday, March 7, following the announcement of a significant order update. The company has signed a major Memorandum of Understanding (MoU) with Indian Port Rail and Ropeway Corporation Limited, a public sector enterprise under the Ministry of Shipping, Government of India. This development has sparked renewed investor interest in the stock, which has been under pressure in recent months.

Order Update Details

K&R Rail Engineering Limited has entered into an MoU with Indian Port Rail and Ropeway Corporation Limited for the execution of major infrastructure projects, including railways, roads, highways, and ports. The projects are valued between ₹50 crore and ₹5,000 crore and are expected to drive mutual growth for both entities within India and abroad.

According to the company, the nature of the contract falls under Engineering, Procurement, and Construction (EPC) in Phase-II. The awarding entity is a domestic organization, and the scope of the project remains within India. Additionally, the company clarified that its promoter group and related entities have no financial interest in the awarding organization, and the contract does not qualify as a related party transaction.

Stock Price Movement

Following the announcement, the railway stock rose as much as 4 percent, reaching an intra-day high of ₹305. Despite this uptick, the stock remains nearly 55 percent below its all-time high of ₹671, which it reached in March 2024. However, it has gained over 9 percent from its 52-week low of ₹278.90, recorded earlier this week on March 5, 2025.

Despite today’s gain, the smallcap stock has faced continued selling pressure over the past five months. It has lost more than 1 percent in March so far, extending its losing streak from previous months. The stock declined 6.5 percent in February, 6 percent in January, over 5 percent in December, and more than 11 percent in November.

Financial Performance

K&R Rail Engineering reported a stellar 523.30 percent year-on-year growth in net profit for Q3 FY25, reaching ₹6.42 crore compared to ₹1.03 crore in Q3 FY24. Revenue from operations for the third quarter stood at ₹145.52 crore, marking a 4.6 percent year-on-year growth.

On a nine-month basis, however, the company’s net profit declined by 6.49 percent to ₹14.55 crore in 9M FY25 from ₹15.56 crore in 9M FY24. Revenue for the same period stood at ₹457.13 crore, reflecting a 10.91 percent year-on-year decline.

About K&R Rail Engineering

K&R Rail Engineering is engaged in end-to-end EPCC (Engineering, Procurement, Construction, and Commissioning) services, including earthwork, bridges, track works, civil construction, overhead electrification (OHE), signaling & telecommunication (S&T), railway operations, maintenance consultancy, and detailed project report (DPR) preparation.

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