Railway Stocks Rally Up to 13% as New Passenger Fares Take Effect
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New Delhi: Railway-linked stocks witnessed a strong rally on Friday, rising by up to 13 per cent, as fresh passenger fare revisions came into force and investor sentiment improved ahead of the Union Budget 2026.
Rail Vikas Nigam Ltd (RVNL) led the gains, surging as much as 13.21 per cent to Rs 391.40 on the BSE from its previous close of Rs 345.70. Despite the sharp jump, RVNL remains down nearly 9 per cent on a year-to-date basis in 2025.
Buying interest was visible across the railway ecosystem. RailTel Corporation of India climbed 8.11 per cent to Rs 385.45, while railway financier IRFC advanced 8.65 per cent to Rs 131.95. Engineering firm Texmaco Rail & Engineering gained 4.47 per cent to Rs 140.10, and catering major IRCTC traded 3.79 per cent higher at Rs 705.30.
What Triggered the Rally?
The immediate trigger for the rally was the implementation of revised passenger fares, effective from Friday. This marks the second fare rationalisation within a year, following an earlier revision in July.
In a press release, the government said the new fare structure aims to balance passenger affordability with the financial sustainability of railway operations. Notably, no fare hike has been imposed on second-class ordinary journeys up to 215 km, ensuring short-distance travellers and daily commuters remain unaffected.
For longer distances, fares have been revised gradually, with increases ranging from Rs 5 to Rs 20 depending on distance slabs. Mail and Express train fares have also been rationalised at 2 paise per kilometre across classes, a move markets see as supportive of revenue stability.
Budget Expectations Add Momentum
Beyond fare revisions, sentiment has improved ahead of the Union Budget 2026, where investors expect higher capital expenditure for railways. Historically, railway stocks tend to attract buying interest in the pre-Budget phase on hopes of infrastructure expansion and fresh project announcements.
The sharp rally in railway stocks reflects renewed investor confidence driven by modest fare reforms and growing optimism around Budget 2026. While near-term gains may see some volatility, sustained capital spending and operational reforms could keep railway-linked stocks firmly on investors’ radar in the months ahead.