Analysts pick IRCTC, 1 other railway stock for likely gain of up to 16%

Nitant Darekar of Bonanza believes that railway stocks present a compelling investment opportunity, and merit accumulation for investors seeking infrastructure exposure ahead of Budget 2026.

Railway-related stocks have zoomed up to 33 per cent in the last 10 trading days as optimism builds ahead of the upcoming Budget 2026 following the recent rail fare hike. The Indian Railways implemented a fare hike on December 26, 2025.  Among individual stocks - Jupiter Wagons has surged 33.2 per cent from levels of ₹254 on December 18, 2025. Rail Vikas Nigam (RVNL) and Ircon International have rallied around 20 per cent each, shows data from ACE Equity.  Meanwhile, Indian Railway Finance Corporation (IRFC), Railtel Corporation of India, Titagarh Rail Systems, Texmaco Rail & Engineering and Rites shares have gained in the range of 10 - 16 per cent each in the same period, shows data.  Amid the recent rally in railway-related stocks, Nitant Darekar, Research Analyst at Bonanza believes that railway stocks present a compelling investment opportunity ahead of Budget 2026.  "Recent fare hikes signal revenue rationalisation, with the December increase alone expected to generate ₹600 crore additional revenue, improving Indian Railways' internal cash generation," says Nitant Darekar.  The analyst expects an allocation of around ₹3 lakh crore (10-12 per cent increase) toward modernisation priorities, including Kavach anti-collision systems, 300-400 Vande Bharat sleeper trains, dedicated freight corridors, and safety upgrades in the Union Budget 2026.  Darekar reckons that railway stocks merit accumulation for investors seeking infrastructure exposure given the government's sustained commitment to railway infrastructure, reduced budgetary dependence, and medium-term visibility on ecosystem opportunities.  Meanwhile, Kunal Kamble, Sr. Technical Research Analyst at Bonanza recommends investors should watch out for Rites and IRCTC shares for likely near-term gains. 

IRCTC

Current Market Price: ₹690 

 

  IRCTC is currently trading near ₹690 after an extended corrective phase from its highs, forming a broad base around the ₹660 – ₹680 support zone, says Kunal Kamble.  The stock had hit a high of ₹1,111 in May 2024, and since then has been declining, shows the historical chart.  Kamble explains that IRCTC stock remains below key short- and medium-term EMAs, indicating consolidation, but downside momentum appears to be weakening.  "RSI around 43 is stabilizing and shows early signs of a potential reversal from the lower band. A conditional buy above ₹710 is advised, as this level marks a trendline and EMA confluence, signalling a structural breakout," said Kunal Kamble.  The analyst expects the stock to move towards ₹760 – ₹800 in the medium term - suggesting a potential upside of 16 per cent from present levels; but cautions that the structure may weaken below ₹680. 

Rites

Current Market Price: ₹245 

 

  Rites is trading near ₹245, and holding above the rising base support at ₹238 – ₹240, indicating strong demand at lower levels, highlights Kamble.  "Although the stock trades below the 50- and 100-EMA, it remains above the 200-EMA, keeping the medium-term structure intact. RSI near 48 is neutral and showing signs of stabilization, suggesting selling pressure is easing," said Kamble.  The analyst believes that downside for Rites stock seems to be limited around ₹238, while a bounce or breakout above ₹255 can trigger a rally toward ₹265 – ₹270. This implies an upside potential of 10.2 per cent from current levels.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.