Railway shares extend run as fare hike kicks in today; RVNL, IRCTC, IRFC rise up to 12%

RVNL, IRCTC, IRFC Railway shares extend rise on Friday. 

Railway-linked shares extended their rally on Friday, rising up to 12 percent, as the revised passenger train fares came into effect from today.

Shares of Rail Vikas Nigam Ltd (RVNL), Indian Railway Finance Corporation (IRFC), Indian Railway Catering and Tourism Corporation (IRCTC) and RailTel were among the top gainers in the sector.

RVNL led the rally, climbing as much as 12.58 percent to Rs 389.20 on the NSE, at around 12 p.m. IRFC rose 9.27 percent to Rs 132.75, while IRCTC gained 4.59 percent to Rs 710.85. Jupiter Wagons was up 2.85 percent at Rs 350.30.

The government’s revised passenger train fares came into effect from Friday, marking the second fare hike this year. The Indian Railways had earlier announced that the new fare structure would be effective from December 26 and is expected to generate additional revenue of about Rs 600 crore in 2025-26.

Market participants said the fare hike is being seen as a positive for the sector as it improves the financial position of the Railways, which could support higher spending on infrastructure, wagons and related services.

Shravan Shetty, Managing Director of Primus Partners, said the gains were linked to the fare hike announcement and its potential impact on railway finances.

"While railway stocks are not directly impacted by fare revisions, an improvement in the financial health of Indian Railways could accelerate capital expenditure and support revenue growth for wagon and infrastructure players," Shetty said.

He added that many railway stocks had declined on a year-to-date basis and the recent developments are helping them recover.

Analysts said investors are also positioning ahead of the budgetary allocations for the sector in the upcoming Union Budget 2026-27.

Sunny Agrawal, Head of Fundamental Research at SBI Securities, said the rally has largely been driven by Budget-related expectations.

He said the initial trigger was the conversion of a preferential issue by the promoter of Jupiter Wagons, which led to a sharp rise in the stock and subsequently spilled over to other railway engineering, procurement and construction (EPC) companies.

Agrawal said SBI Securities prefers wagon-related businesses and sees the current rally as an opportunity to book profits in railway EPC stocks such as IRCON, RITES and RVNL.

"Any further rise ahead of the Budget should be utilised for profit booking," he said.

The Indian Railways has raised passenger fares by up to 2 paise per km. An official statement on Thursday said Sleeper, AC and non-AC classes will see a one paise per km increase for non-mail or non-express trains, while Mail or Express fares will go up by 2 paise per km.

Reports said passenger fares could see further increases going ahead.

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