Shares of railway companies--Titagarh Wagons, RVNL, Jupiter Wagons were in the spotlight, surging as much as 7 percent ahead of the Union Budget. The sector has been at the centre of the government's 'Make in India' push in recent years, which has left investors hoping for similar attention on railway companies this time around as well.
Jupiter Wagons, Titagarh Rail Systems, BEML, RITES, Rail Vikas Nigam, Texmaco Rail & Engineering, and RailTel Corporation were trading 3-7 percent higher ahead of finance minister Nirmala Sitharaman's budget speech.
Expectations are high for significant announcements for the railway sector, with analysts predicting a 15–20 percent spike in allocations to Rs 3 lakh crore.
In the Union Budget 2024-25, presented on July 23, the railway ministry was allocated a record Rs 2.62 lakh crore for capital expenditure, with approximately Rs 2 lakh crore utilized by January 5. For the upcoming budget, analysts anticipate a 15-20 percent increase, potentially raising the allocation to Rs 3 lakh crore.
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Mandar Bhojane, Equity Research Analyst at Choice Broking, noted that while railway capital outlay has been steadily rising over the past five years, execution has lagged behind project timelines. He expects companies within the railway ecosystem to benefit from government incentives under the Make in India initiative and Public-Private Partnership (PPP) models.
The government is reportedly planning to procure 90 additional Vande Bharat trains and provide funding for high-speed rail testing infrastructure, including a dedicated Rs 820 crore test track in Rajasthan.
A major wagon order, valued between Rs 20,000 crore and Rs 25,000 crore, is expected to support freight transportation and increase the railways’ current 27 percent market share in cargo. Additionally, funds are likely to be directed towards achieving 100 percent electrification of broad-gauge lines and enhancing safety through upgrades to signaling, level crossings, and bridges.
Currently, Indian Railways operates 136 Vande Bharat trains nationwide, with further announcements expected to expand Vande Bharat services and introduce Vande Metro trains designed for suburban travel.
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