RVNL, IRFC, IRCTC: Railway stocks rally up to 12% in trade; here's why

Railway stocks surged after the Indian Railways implemented a revised passenger fare structure which marks the second fare hike in the 2025-26 financial year

Shares of rail-related companies witnessed a sharp rally on Friday, gaining as much as 12 per cent following the implementation of a revised passenger fare structure and optimism around an increase in capital expenditure in the upcoming Union Budget.

 

At close on BSE, Rail Vikas Nigam (RVNL) was higher by 12.22 per cent, while Indian Railway Finance Corporation (IRFC) followed closely, rising 9.92 per cent. Other notable gainers included Railtel Corporation (6.03 per cent), Titagarh Rail Systems (4.96 per cent), Ircon International (4.87 per cent), Rites (4.1 per cent), Indian Railway Catering and Tourism Corporation (IRCTC) (3.72 per cent) and Jupiter Wagons (2.98 per cent).

 

 

“In the case of IRCTC, sentiment was bolstered by the fare rationalisation that became effective on December 26. RailTel also saw renewed buying interest amid market speculation and optimism regarding a potential partnership with Elon Musk’s Starlink,” said Balaji Rao Mudili, research analyst, Bonanza Portfolio.

 

Way2Wealth Research is positive on the outlook for IRCTC due to strong demand and operational efficiency. However, it has a hold rating on the stock, given the premium valuations and regulatory risks which limit the upside.

 

Brokerages are bullish on Titagarh Rail Systems. Systematix Research has a buy rating as it expects a growth of 70 per cent in revenue and operating profit in FY27, owing to a low base, faster ramp-up in passenger rail system production capacity and commencement of wheels’ production. 

 

The Ministry of Railways has introduced a marginal, graded increase to rationalise fares. Under the new structure, ordinary non-AC class fares have increased by one paise per kilometre. For Mail and Express trains—covering both AC and non-AC categories—the hike is set at two paise per kilometre.

 

Analysts also attribute the sustained rally in railway-linked stocks over the past few days to expectations of continued strengthening in sectoral spending and a favourable Union Budget.

 

“The rally in railway stocks is being driven by building expectations ahead of the Union Budget. There is a strong anticipation that the government will further scale up railway capex and overall infrastructure outlays, and this positive outlook is being reflected in the sector's performance,” said Kranthi Bathini, director of equity strategy, WealthMills Securities.

 

Echoing this sentiment, Mayank Jain, market analyst, Share.Market, noted, “The market is currently factoring in a substantial increase in capital expenditure, with total allocations projected to rise by 10–12 per cent to approximately ₹2.7 trillion.”

 

In a week, IRFC shares have gained 19 per cent, Rites rose 15 per cent, Titagarh Rail climbed 17 per cent, Jupiter Wagons rallied 39 per cent, RVNL surged  27 per cent, and IRCTC soared 7 per cent. 

 

Commenting on the outlook for IRCON International, Antique Stock Broking points out that the company continues to diversify beyond its core railway and EPC road segments into emerging areas such as Kavach, hydropower, and renewable energy. The brokerage has a hold rating with a target price of ₹159. It believes that sustained order inflows remain key to future growth and stock performance.