Shares of major railway companies have shot up more than 20% in just five trading days, catching the eye of many retail investors.
Why railway stocks are soaring
Analysts say the rally is driven mainly by market sentiment, not a sudden improvement in company fundamentals. After a tough year with falling valuations and foreign investor exits, the sector is now being viewed more positively because investors expect upcoming budget measures to help.
Impact of the passenger fare hike
The latest passenger fare increase, effective from December 26, adds about 1–2 paise per kilometre. Though small, it could bring roughly ₹600 crore of extra revenue this fiscal year, improving earnings visibility for Indian Railways and its related public‑sector units.
Pre‑budget expectations
Investors are also betting that the 2026 budget will allocate more money for railway infrastructure—like new tracks, modern signalling, and upgraded rolling stock. Historically, railway stocks rise before a budget when policy‑driven growth looks likely.
Cautious outlook for investors
Despite the strong price moves, many experts advise a careful approach. The rally is largely based on expectations rather than immediate earnings gains. Over the long run, performance will depend on actual budget support, timely project execution, and disciplined cash flow. Investors should look at each company’s fundamentals before riding the short‑term momentum.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research or consult a certified financial advisor before making any investment decisions.