Why Railway Stocks Are Rising High?

Railway-related stocks saw a notable rally of up to 11% in Thursday’s intraday trade on the BSE, driven by heavy trading volumes. The surge follows expectations of a higher capital expenditure (capex) allocation for the railway sector in the Budget 2025-26.

Top Performers

Stocks such as Transrail Lighting, Rail Vikas Nigam Limited (RVNL), IRCON International, Jupiter Wagons, Titagarh Wagons, RITES, Indian Railway Finance Corporation (IRFC), Texmaco Rail, RateGain Travel Technologies, and RailTel Corporation gained between 4% and 11%. In comparison, by 12 PM, the BSE Sensex had risen 280.68 points (0.37%) to 77,004.76, while the Nifty50 climbed 88.75 points (0.38%) to 23,301.95.

Higher Capex for Railways Expected

Reports suggest a 20% increase in capex for the railway sector in FY26, raising the allocation to over ₹3 trillion from ₹2.65 trillion in FY25. About 80% of the FY25 allocation has already been utilised, with the remaining expected to be spent by the fiscal year-end.

The increased funding will be used for:

• Laying new tracks and upgrading existing ones.
• Procuring locomotives, wagons, and coaches.
• Launching Vande Bharat sleeper trains for enhanced passenger comfort.
• Accelerating work on high-speed rail projects, with the National High-Speed Rail Corporation expected to receive a higher allocation.

Push for Public-Private Partnerships

The railways also aim to boost investments through public-private partnerships (PPP). For FY25, a ₹10,000 crore capex target via PPP was set, with 90% achieved by mid-January. This trend is likely to continue into FY26.

Transrail Lighting: Strong Growth and Promising Order Book

Transrail Lighting share price surged 11% to ₹662.90 in intraday trading. Since its market debut on December 27, 2024, the stock has gained 53% over its issue price of ₹432.

Business Highlights

• Revenue has grown at a 20% annual rate over the last 3 years.
• Approximately 55-60% of its order book consists of international projects.
• The company is progressing on a ₹3,100 crore river-crossing project in Bangladesh despite earlier delays due to design approvals and political unrest.

RVNL Secures Major Project

Rail Vikas Nigam Share Price jumped 9% to ₹406.10, marking a 13% rise over 3 days. The company announced receiving a Letter of Acceptance from Bharat Sanchar Nigam Limited (BSNL) for the development and maintenance of the BharatNet middle-mile network.

Project Details

• Total contract value: ₹3,622.14 crore, including operational costs.
• Execution: 3 years for construction, followed by 2 five-year maintenance phases.
• Partners: HFCL and ATS, with RVNL as the lead.

This project is expected to significantly contribute to RVNL’s growth in the coming years.

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