After a strong run, railway stocks slipped on Monday, showing that the excitement around the upcoming budget is easing.
Recent Rally and Current Pullback
Shares of Rail Vikas Nigam Ltd (RVNL) fell 4.1%, while Indian Railway Finance Corp (IRFC) dropped 4.4% after climbing more than 20% in the past five sessions. Jupiter Wagons, which had surged 36.9% recently, slipped 3.5%.
Why the Stocks Rose Earlier
- New passenger‑fare hike that started on Dec 26 is expected to add about ₹600 crore in revenue for FY26.
- Analysts think higher railway earnings could lead to more spending on tracks, wagons and related services.
- Technical factors: many railway shares had been low for months and were near long‑term support, so a bounce was triggered when market sentiment improved.
- Company news, such as Jupiter Wagons converting a promoter’s preferential issue, added extra optimism.
What Triggered the Drop
A report suggested that the upcoming budget may only raise railway capital spending by about 4% to ₹2.75 trillion, less than some investors hoped. That news cooled the mood, and traders started taking profits after the recent rally.
Seasonal Trend Still Holds
Historically, railway shares tend to rise in the weeks before the Union Budget as investors expect higher allocations and better infrastructure spending. Even with today’s pullback, the pattern remains the same.
Takeaway for Investors
While the recent rally offered quick gains, the slowdown shows the importance of not chasing hype. Consider booking some profits and keep an eye on actual budget announcements before making new bets.
Remember, this is just perspective, not a prediction. Do your own research or talk to a certified advisor before deciding.