Synopsis: Railway stocks, including IRCON, IRFC, RVNL, Jupiter Wagons, and other rail-linked companies, have surged over the past three days, drawing investors back to the sector after earlier losses in 2025. In this article, let’s explore whether this is a technical rebound or driven by pre-Budget optimism.
The Railway stocks are back in the spotlight as shares of IRCON, IRFC, RVNL, Jupiter Wagons, and other rail-linked companies have surged over the past three days. The strong rally across the sector has brought investors back to stocks that had caused losses for much of 2025.
In this article, let’s explore the reasons behind the stock market rally and examine whether the gains over the past three days are driven by a technical rebound or by pre-budget optimism.
Reasons Behind the Railway Stocks Rally
Technical Rebound
Many Railway stocks were trading at a 45–55% discount from their 52-week highs before the recovery over the last three days. Currently, IRCON is trading at a 26% discount, RVNL at 31%, IRFC at 23%, and Jupiter Wagons at 38% and other railway-linked stocks are also trading at a discount.
The stocks were trading at a discount, which created a favourable risk-reward setup, and such discounted levels can offer a good entry opportunity for a potential recovery move, with relatively limited downside compared to upside.
High Trading Volumes
Railway stocks have seen a sudden jump in trading activity, with volumes much higher than usual. This shows that investor interest in the sector has increased again. IRCON International saw its biggest one-day rise in the last six months today. By noon, more than 2.5 crore shares were traded, far higher than its usual 20-day average of 15 lakh shares.
RVNL continued its upward move for the third day in a row, supported by strong buying. About 2.08 crore shares were traded by noon today, much higher than its 20-day average of 24 lakh shares.
IRFC also saw heavy trading, with nearly 5.5 crore shares changing hands by noon, compared to its normal 20-day average of 40 lakh shares. Along with government-owned railway companies, private stocks are also moving up. Jupiter Wagons stood out, with over 13.5 Crore shares traded so far, well above its 20-day average of 22 lakh shares, making it one of the top gainers.
Fare Hike
Indian Railways has announced a revision in train fares that will take effect from December 26, 2025, to adjust ticket prices in line with rising operational costs. Under the new structure, passengers travelling beyond 215 km will pay 1 paisa more per km in ordinary class and 2 paise more per km in non-AC and AC mail/express classes.
Short-distance travel up to 215 km, suburban services and monthly season tickets will not see any increase. By this, the Railways expects to generate about Rs. 600 crore in additional revenue, helping address higher costs while keeping fares relatively moderate for most travellers.
IRCTC is expected to benefit from higher ticketing revenue and improved margins as fare hikes support overall railway earnings. With Indian Railways estimated to generate around Rs. 600 crore in additional revenue, it strengthens the overall railway ecosystem and is indirectly channelled into awarding more orders and projects to other railway-linked companies.
Promoter & Corporate Actions
Jupiter Wagons, the railway stock that has rallied over 40% over the last three days, saw the surge mainly due to an increase in promoter shareholding following the conversion of warrants into equity.
Tatravagonka A.S., the promoter entity, acquired 28.72 lakh equity shares after converting the warrants. As a result, the promoter’s stake increased to 19.24% from 18.69%, marking a 0.55% rise in shareholding.
Pre-Budget Optimism
The Capex-heavy sectors often attract investor attention ahead of the Union Budget, and the railway sector is no exception. The renewed interest comes in the backdrop of the FY 2025-26 Indian Railway Budget, which allocated around Rs. 2.52–2.65 lakh crore for major infrastructure, safety, and modernisation projects.
Looking ahead to Budget 2026–27, markets expect a 10–12 percent increase in railway capex, bringing the total outlay to approximately Rs. 2.77–2.97 lakh crore. This is anticipated to fund the next phase of modernisation, including the introduction of 300–400 Vande Bharat sleeper trains and a doubling of allocations for the Kavach safety system.
With the Union Budget scheduled for February, railway stocks typically gain momentum as investors anticipate higher government allocations and accelerated infrastructure spending.
Written by Sridhar J
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