Railway stocks surged on Thursday amid reports that the Union Budget 2025-26, scheduled for February 1, could see a significant 15-18 percent hike in budgetary allocation for the Ministry of Railways. The anticipated increase has boosted investor sentiment, reversing the downward trend seen in recent months.
According to a Moneycontrol report, the government may allocate Rs 2.9-3 lakh crore as gross budgetary support (GBS) for Indian Railways in 2025-26. The expected increase in capital expenditure aims to boost railway infrastructure, modernisation, and the production of Vande Bharat trains.
Railway stocks, which had fallen sharply from their record highs in 2024 due to high valuations and broader market correction, rebounded strongly.
Ircon International led the charge, with its shares rising 11.45 percent to Rs 212.5 on the NSE. Similarly, Rail Vikas Nigam Ltd (RVNL) and Railtel Corporation of India posted gains of 11.66 percent and 8.77 percent, respectively.
Retail favourite Indian Railway Finance Corporation (IRFC) also witnessed strong buying interest, climbing 5.95 percent to an intraday high of Rs 145.75. By 1:30 PM, the stock traded at Rs 144.20, up 4.83 percent. Despite the gains, IRFC remains nearly 37 percent below its 52-week high of Rs 229.
Other railway stocks joined the rally, with Titagarh Rail Systems Ltd advancing 6 percent to Rs 1,072.55 and Texmaco Rail & Engineering jumping nearly 9 percent.
The anticipated budget hike comes after the modest five per cent increase in the FY25 budget, which raised the railways' allocation from Rs 2.4 lakh crore to Rs 2.52 lakh crore. Market participants are optimistic that higher spending in FY26 will accelerate stalled railway contracts and revive growth momentum.
Railway stocks had been under pressure due to broader market corrections and higher valuations. However, the potential hike in the budgetary allocation has revived investor confidence, signalling robust growth prospects for the sector.
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