Railway PSU Stocks Jump Up to 26% in 5 Sessions: Here’s What’s Fueling the Surge

Railway stocks have witnessed a sharp rally over the past 5 trading sessions, with several public sector undertakings (PSUs) delivering double-digit gains in a short span. RVNL share price has surged more than 26%, rising from around ₹306 to ₹387.25. IRFC share price has climbed over 20%, while IRCON Internationalshare price gained close to 19%. 

The sudden rise has caught investors’ attention, especially as there has been no major change in the core business fundamentals of these companies.

Why Are Railway Stocks Rising?

The recent surge in railway stocks appears to be driven largely by improving market sentiment rather than immediate earnings upgrades. Many railway PSUs had corrected sharply over the past year due to high valuations, margin pressure, and foreign investor selling. This correction left several stocks technically oversold, setting the stage for a sharp rebound.

As the Union Budget approaches, investors have started positioning themselves for potential policy support for the railway sector. Expectations of higher capital expenditure, increased budgetary support and faster order execution have helped revive interest in railway-linked stocks.

Read more: Indian Railways Has Spent Nearly 80% of FY26 Budgetary Allocation: What is Next?

Passenger Fare Hike Adds to Optimism

A key short-term trigger has been the passenger fare hike implemented in FY26, effective from December 26, 2025. Although the hike is modest (around 1–2 paise per kilometre) it is expected to generate nearly ₹600 crore in additional revenue during the current financial year.

This move has been seen as a positive step towards improving the financial health of Indian Railways and ensuring more stable long-term earnings for railway PSUs.

Budget 2026 in Focus

The rally has also been supported by pre-Budget optimism. Investors are betting on continued government focus on railway infrastructure, including network expansion, rolling stock, safety upgrades, signalling systems and modernisation.

Historically, railway stocks tend to perform well ahead of Union Budgets due to their dependence on government policy and capital spending decisions. This pattern appears to be repeating in the current rally.

Conclusion

The recent rally in railway stocks reflects renewed optimism around policy support, fare reforms and Budget expectations. While short-term momentum remains strong, long-term performance will hinge on execution and fundamentals. Investors holding railway shares in their demat account should avoid chasing sharp rallies and focus on company-specific strengths.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.