Railway stocks are once again garnering attention after a subdued last year amid the latest fare hike and as the Union Budget 2026 approaches. In the last two weeks or 10 trading days, railway stocks have jumped up to 13%, according to data from Capitaline.
Ircon International has seen a sharp 14% jump, followed by a 10% rise in Rail Vikas Nigam. IRFC, Titagrah Rail Systems and Jupiter Wagons have gained around 9% each. Meanwhile, IRCTCT has offered only 2%.
Passenger fare hike effective December 26, adding ₹600 crore revenue and pre-Union Budget 2026 optimism for record ₹1.3 trillion capex, have been key drivers of railway stocks, opined Vinit Bolinjkar – Head of Research – Ventura.
Over the past few years, railways have transitioned from being just a means of public utility to a key pillar of India’s capital expenditure cycle, with sustained policy support, improved project execution, and better financial discipline.
As railways play a crucial role in eliminating supply chain bottlenecks and fostering a robust manufacturing and export ecosystem, Ashwini Shami, President and Chief Portfolio Manager, OmniScience Capital, expects it to continue to receive substantial budget allocations for capital investments in the next budget.
PSUs like RVNL and IRFC have also gained from improved operating ratios and safety infra focus (such as Kavach). Pencilling in Budget allocations for railways, Bolinjkar said that in 2026, the government may double safety spending and allocate ₹1.3 lakh crore to fuel momentum.
But does this mean that investors should allocate railway stocks? Well, the analysts believe the answer lies in selectivity and patience.
The Nifty Railways PSU index currently trades at a price-to-earnings multiple of 26 with a mix of undervalued and overvalued opportunities, and hence a bottom-up approach is important to select companies with a good execution track record and favourable valuations, highlighted Shami.
Echoing a similar view, Harshal Dasani, Business Head at INVAsset PMS, said that railway stocks should be viewed more as a selective opportunity than a broad-based trade. “Valuations across several names already factor in optimistic assumptions, making stock selection critical as purely sentiment-driven rallies may struggle to sustain.”
Going ahead, analysts believe, the government’s focus will be on expanding new routes, reducing congestion at key hubs, producing advanced trains and wagons, and improving the safety and efficiency of both freight and passenger services.
Companies from construction and engineering undertaking specific railway and infrastructure projects, component manufacturers and logistics players benefiting from freight share moving to railways are expected to see strong orderbook and earnings growth, opined Shami.
Which railway stocks to buy ahead of Budget?
Analysts have named their top technical and fundamental recommendations. Among the top railway stocks to buy are: RVNL, IRFC, IRCTC, Titagarh and RITES.
Vinit Bolinjkar of Ventura recommended the following stocks:
⦁ RVNL: Top pick with ₹80,000 crore order book, infra focus; target ~ ₹450+ (1-year); +26% recent rally.
⦁ IRFC: Stable leasing/dividends, govt-backed; low-risk for 15- 20% upside.
⦁ IRCON International: EPC strength, +19% gains; undervalued vs peers.
⦁ IRCTC: Monopoly in ticketing/catering; digital growth steady.
⦁ Titagarh Rail Systems: Wagon/coach maker; private sector agility.
On the technical front, Kunal Kamble, Sr. Technical Research Analyst at Bonanza, said that investors can consider buying RITES and IRCTC.
RITES, he said, is trading near ₹245 and consolidating within a symmetrical triangle on the weekly chart after a prolonged correction. “Price is holding above the rising base support at ₹238–240, indicating strong demand at lower levels. Although the stock trades below the 50 and 100 EMA, it remains above the 200 EMA, keeping the medium-term structure intact. RSI near 48 is neutral and showing signs of stabilisation, suggesting selling pressure is easing. Downside appears limited to 2–3% toward ₹238, while a bounce or breakout above ₹255 can trigger a 5–6% upside toward ₹265–270,” Kamble added.
As for IRCTC, the Bonanza analyst said that the PSU stock is currently trading near ₹690 after an extended corrective phase from its highs, forming a broad base around the ₹660–680 support zone. “The stock remains below key short- and medium-term EMAs, indicating consolidation, but downside momentum appears to be weakening. RSI around 43 is stabilising and shows early signs of a potential reversal from the lower band. A conditional buy above ₹710 is advised, as this level marks a trendline and EMA confluence, signalling a structural breakout,” he added.
If triggered, he sees IRCTC stock gradually moving towards ₹760–800 in the medium term. “Below ₹680, the structure weakens, so patience is key for investors.”
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
