Jupiter Wagons led Tuesday’s charge, rising nearly 8% to Rs 335, followed by RailTel Corporation climbing 5.3% to Rs 360. RVNL gained 3% to Rs 342.60, while Titagarh Rail and Texmaco Rail edged up 2% and 1%, respectively. On Wednesday, profit-taking slightly trimmed these gains, though overall momentum remains strong.
What’s driving the rally in railways stocks?
Analysts said the surge is largely sentiment-driven. “The rally was initiated by the conversion of a preferential issue by the promoters of Jupiter Wagons, which triggered a sharp up move in the stock which in turn, spilled over into other EPC-focused railway businesses,” said Sunny Agrawal, head of fundamental research at SBI Securities.IRCTC also saw buying interest after Indian Railways announced a rationalisation of its fare structure effective December 26, while RailTel gained on reports of talks with Elon Musk-owned Starlink for a potential partnership in India. The moves follow a strong session on Monday, when several railway stocks jumped as much as 13% in afternoon trade.
All eyes on the Union Budget
With the Union Budget scheduled for February 1, market activity is picking up as investors anticipate possible increases in railway capex and infrastructure spend. Expectations for Budget 2026–27 include a potential 10–12% increase in railway allocations to around Rs 2.76 trillion, supporting new Vande Bharat sleeper trains and expanded safety systems.
Fundamentals vs technicals
From a fundamentals standpoint, SBI Securities prefers wagon-related businesses, where structural demand is stronger. Agrawal recommended booking profits on any further pre-Budget rally, while retaining exposure to companies with sustainable growth drivers.
Technically, IRCTC is trading above its 20-day SMA, providing key support at 675, according to Amol Athawale, VP, Technical Research, Kotak Securities. If it holds, the stock could climb to 700–710. Titagarh Rail, up over 6% in the past two sessions, shows potential upside to 870–880, provided it stays above 800.
Caution remains
Market experts warned that pre-Budget hype can be short-lived. “While a pre-Budget rally is a historical pattern, the market in 2026 will likely demand concrete evidence of improved margins and faster project commissioning before committing back to the sector at previous highs,” said Santosh Meena, Swastika Investmart.
For now, railway stocks are back in play, but whether the rally continues post-Budget will depend on the allocation numbers and execution on the ground.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
