RVNL, IRFC, IRCON to RailTel: Railway stocks have been skyrocketing for the last five straight sessions. In the previous five sessions, shares of Rail Vikas Nigam Limited (RVNL) have risen from around ₹306 per share to ₹387.25, logging a rise of over 26.50%. IRFC shares have increased from ₹110.81 to ₹133.60 per share in the last five sessions, delivering over 20% return to its shareholders. In the railway stocks’ rally, the IRCON International share price has risen from ₹150 to ₹178.25 apiece, reporting around a 19% upside in this time. Shares of RailTel Corporation of India and Indian Railway Catering and Tourism Corporation (IRCTC) also witnessed a significant rise in buying of these railway stocks.
Why are railway stocks skyrocketing?
On why railway stocks are skyrocketing despite any significant change in the fundamentals of these companies, Ravi Singh, Chief Research Officer at Master Capital Services, said, “The sharp rise in railway stocks such as RVNL, IRFC, and IRCON is driven by a shift in market sentiment rather than any fresh improvement in fundamentals. After correcting sharply over the past year due to valuation concerns, FII exits, and pressure on margins, the sector is now witnessing a revival in its storytelling performance. Expectations surrounding pre-Budget activity, potential capital expenditure support through gross budgetary support and market borrowing, and the possibility of order acceleration are rebuilding investor confidence. This has resulted in a tactical rebound, reflecting a classic sell the rumour, buy the fact phase ahead of Budget-related clarity.”
Passenger fare hike
Pointing towards the passenger fare hike, Seema Srivastava, Senior Equity Analyst at SMC Global Securities, said, “The immediate trigger was the second passenger fare hike in FY26, effective December 26, 2025. While the increase is modest—around 1–2 paise per km, depending on the travel class—it is estimated to generate nearly ₹600 crore of incremental revenue in the current fiscal, improving revenue visibility for Indian Railways and signalling a gradual move towards better financial sustainability for the sector. This has been perceived positively by the market as it supports the long-term earnings stability of rail-linked PSUs.”
Budget 2026 in focus
Highlighting the importance of pre-budget expectations, which may continue to fuel railway stocks, Seema Srivastava said, “Beyond the fare hike, the rally is being amplified by pre-Budget positioning, with investors factoring in the likelihood of continued emphasis on railway-led infrastructure spending. Expectations of sustained or higher capex allocations for network expansion, rolling stock, signalling, safety upgrades and modernisation have revived interest across railway PSUs, which historically tend to react positively ahead of budgets due to policy-driven growth visibility.”
However, Seema Srivastava of SMC Global Securities maintained that from a prudent investment perspective, caution is warranted. The recent upmove appears essentially sentiment- and expectation-led rather than supported by a sharp near-term improvement in earnings. Many railway stocks had underperformed through much of 2025, making them technically oversold and vulnerable to sharp relief rallies driven by bargain hunting. Over the long term, returns will hinge on the actual scale of budgetary support, the timely execution of awarded projects, cash-flow discipline, and sustained progress on fare rationalisation. Investors should therefore focus on business-specific fundamentals and execution capability rather than extrapolating short-term momentum.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
