IRCON, RVNL, RAILTEL jump up to 10 Per Cent in just 1 day; Do you hold any?

Indian railway stocks witnessed a sharp uptrend today, with several public sector undertakings (PSUs) and listed players in the segment recording notable gains.

Indian railway stocks witnessed a sharp uptrend today, with several public sector undertakings (PSUs) and listed players in the segment recording notable gains. Leading the rally was Ircon International, which surged over 10 per cent to Rs 214.54. Other prominent gainers included RailTel Corporation and Texmaco Rail & Engineering, rising by approximately 8 per cent each. Rail Vikas Nigam Ltd (RVNL) and RITES also advanced by over 5 per cent, signalling renewed investor interest after a significant market correction earlier in the year.

The surge follows a broad-based correction during which many railway-related stocks had declined by 30–50 per cent from their all-time highs reached in mid-2024. This price drop had opened up attractive entry points, especially for value investors looking at Small-Cap and Mid-Cap railway counters.

One of the primary triggers for the rally has been strong Quarterly Results. RailTel Corporation posted a 46 per cent year-on-year (YoY) jump in net profit and a 57 per cent YoY rise in net sales for the March 2025 quarter. Similarly, RITES, while showing only a modest 2.45 per cent rise in net profit, reported a record-high order book of Rs 8,877 crore as of March 31, 2025. This signals long-term revenue visibility, which is crucial for infrastructure-focused investors.

Company-specific developments also played a key role. IRFC recently received board approval to raise up to Rs 60,000 crore in FY26, reflecting its long-term expansion plans. While the company reported a slight dip in quarterly profits, the fund-raising plan is expected to support future growth, potentially enabling more loans to other railway projects or PSUs.

Furthermore, the rally can be attributed to attractive valuations following the recent correction. Many railway stocks are now trading below their historical average price-to-earnings (P/E) ratios, catching the attention of long-term investors.

Broader market sentiment has also turned positive, with mid-cap and small-cap indices outperforming Large-Cap benchmarks. Indices like the Sensex and Nifty are comfortably trading above key moving averages, creating a bullish environment that has spilled over into the railway segment.

Lastly, the sector continues to benefit from strong budgetary and policy support. The Indian government has allocated a record Rs 2.62 lakh crore for the railway sector in the FY 2025–26 Union Budget. With a sustained focus on infrastructure development, digitalisation, and railway modernisation, railway stocks remain a focal point for investors anticipating long-term multibagger opportunities.

Conclusion
The recent rally in Indian railway stocks is underpinned by solid fundamentals, favourable policy backing, and renewed investor interest. With continued government support and strong earnings performance, these stocks are gaining traction again, especially after trading at discounted valuations. The long-term outlook remains positive, backed by consistent order flows and robust budgetary allocations.

Disclaimer: The article is for informational purposes only and not investment advice.