RVNL, IRCTC and Jupiter Wagons shares are active again. Should railway stocks enter the Union budget?

Railroad stocks are back in the spotlight as 2025 draws to a close, with investors snapping up names that have struggled for much of the year. Shares of RVNL, IRCTC, Jupiter Wagons, RailTel, Texmaco Rail and Titagarh Rail posted sharp gains this week, attracting buyers to a sector now buzzing with pre-Budget speculation. The question investors are asking is: is this a sustainable turnaround, or just another pre-budget spike?Jupiter Wagons led the charge on Tuesday, rising nearly 8% to Rs 335, followed by RailTel Corporation which rose 5.3% to Rs 360. RVNL gained 3% to Rs 342.60, while Titagarh Rail and Texmaco Rail rose 2% and 1% respectively. On Wednesday, profit taking reduced these gains somewhat, although overall momentum remains strong.

What’s Driving the Rally in Railroad Stocks?

Analysts said the increase is largely sentiment-driven. “The rally was triggered by the conversion of a preferential issue by the promoters of Jupiter Wagons, which caused a sharp rise in the shares, which in turn spilled over to other EPC-focused railway companies,” said Sunny Agrawal, head of fundamental research at SBI Securities. IRCTC also saw buying interest after Indian Railways announced a rationalization of its fare structure on December 26, while RailTel profited on reports of talks with Elon Musk-owned Starlink over a possible partnership in India. The moves follow a strong session on Monday, when several railroad stocks rose as much as 13% in afternoon trading.

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 expenditure on railway investments and infrastructure. Expectations for the 2026-2027 budget include a potential 10-12% increase in railway allocations to around Rs 2.76 trillion, to support new Vande Bharat sleeper trains and expanded safety systems.

Fundamental versus technical aspects

From a fundamental point of view, SBI Securities prefers vehicle-related businesses, where structural demand is stronger. Agrawal recommended booking profits on any further pre-Budget rally while maintaining exposure to companies with sustainable growth engines.

Technically, IRCTC is trading above its 20-day SMA and offering key support at 675, according to Amol Athawale, VP, Technical Research, Kotak Securities. If this holds, the stock could rise to 700-710. Titagarh Rail, up over 6% in the last two sessions, shows potential upside to 870-880 provided it remains above 800.

Caution remains advised

Market experts warned that the pre-Budget hype could be short-lived. “While a pre-Budget rally is a historical pattern, the market is likely to demand concrete evidence of improved margins and faster commissioning of projects in 2026 before rallying back to previous industry highs,” said Santosh Meena of Swastika Investmart.For now, railway stocks are back in play, but whether the post-Budget rally continues will depend on the allocation figures and execution on the ground.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)