New passenger fare hikes for Indian Railways have kicked off a rally in railway‑related stocks, with some climbing double‑digits.
Key stock moves
On Friday:
- RVNL surged up to 12.58% to ₹389.20.
- IRFC rose 9.27% to ₹132.75.
- IRCTC gained 4.59% to ₹710.85.
- Jupiter Wagons added 2.85% to ₹350.30.
What triggered the rally?
The government’s revised passenger‑train fares took effect today, marking the second hike this year. The new fare structure is expected to add about ₹600 crore in revenue for 2025‑26, improving the railways’ cash flow.
Why it matters to investors
Better finances for Indian Railways can lead to more spending on tracks, wagons and related services. That, in turn, supports companies that build and maintain railway infrastructure.
- Higher capital expenditure can boost earnings for wagon makers and EPC firms.
- Improved revenue outlook may make railway stocks more attractive.
Analyst opinions
Primus Partners’ MD Shravan Shetty notes that while fare changes don’t directly affect stock prices, a stronger railway balance sheet could speed up projects and lift revenue for related firms.
SBI Securities’ Sunny Agrawal says the rally is also fueled by expectations of favorable budget allocations for the sector in the upcoming Union Budget 2026‑27. He suggests investors consider booking profits as the rally may peak before the budget.
What’s next?
Passenger fares have risen by up to 2 paise per km, with sleeper, AC and non‑AC classes seeing a 1‑paise increase for non‑express trains and 2 paise for express services. Further fare hikes are possible, which could continue to support railway stocks.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.