Railway Stocks Tumble Post-Budget Announcement as Indian Railways Unveils Ambitious Overhaul Plans for 2025-26

India’s railway sector is set for a major overhaul with plans for new Vande Bharat, Amrit Bharat, and Namo Bharat trains, alongside infrastructure projects funded by a ₹2.52 lakh crore budget. Despite infrastructure boosts, cuts to customer amenities and PSU investments caused a drop in railway stocks. The budget also emphasizes 100% electrification and a 7,000 km high-speed rail network by 2047.

CONTENTS:

• India’s Railway Sector Set for Major Overhaul with New Trains, Coaches, and Infrastructure Projects in FY 2025-26 Budget
• Union Budget 2025-26: Indian Railways Allocation Maintained, Customer Amenities and PSU Investments Slashed
• India’s Railway Sector Set for Major Overhaul with New Trains, Coaches, and Infrastructure Projects in FY 2025-26 Budget

Railway Stocks Tumble Post-Budget Announcement as Indian Railways Unveils Ambitious Overhaul Plans for 2025-26

India’s Railway Sector Set for Major Overhaul with New Trains, Coaches, and Infrastructure Projects in FY 2025-26 Budget

Railway Stocks Tumble Post-Budget Announcement In the lead-up to the Union Budget 2025, several major railway stocks such as RVNL, IRCON, IRFC, and RailTel saw a rise in value, fueled by expectations of increased allocations and infrastructure development. However, after Finance Minister Nirmala Sitharaman’s Budget speech on February 1, which kept the railway sector’s allocation unchanged at ₹2.51 lakh crore for FY2026, these stocks saw a significant drop, with some falling by up to 10% in intraday trading.

Key stock movements during the week included:

• IRCTC: The stock remained stable with a slight 3.44% drop. IRCTC gained attention due to the ongoing Kumbh Mela, where it introduced special trains. The company will also announce its financial results and potentially declare a second interim dividend on February 11.
• Indian Railway Finance Corporation (IRFC): The stock rose by 0.13% after reporting a slight increase in profit and revenue for Q3 FY25. However, it closed 6.32% lower by the week’s end.
• RVNL: The stock declined by 9.43%, largely due to the overall sector slump post-Budget. RVNL had earlier been in the spotlight for securing a major project.
• IRCON: This stock also fell 9.5%, despite announcing a contract for a road project in Manipur.
• RITES Ltd: RITES saw a 2.24% drop after reporting a decline in revenue and net profit for Q3 FY25. The company declared a ₹1.9 per share interim dividend.
• RailTel: Despite a strong Q3 FY25 performance with a 5% increase in net profit, the stock dropped 6.87% by Saturday.
• Container Corporation of India (Concor): Concor’s stock increased by 0.28% after reporting an 11% rise in net profit, although its revenue remained flat.

Other railway-related stocks like Titagarh Rail and BEML saw minor changes, with Titagarh declining and BEML gaining 0.65%.

Union Budget 2025-26: Indian Railways Allocation Maintained, Customer Amenities and PSU Investments Slashed

Railway Stocks Tumble Post-Budget Announcement The Union Budget for FY 2025-26 has allocated ₹2.65 lakh crore for Indian Railways, maintaining the same amount as the previous fiscal year. However, the budget cuts allocations for customer amenities and investments in public sector units (PSUs) and joint ventures.

The allocation for customer amenities, which covers services like maintaining toilets, improving station facilities, and enhancing security measures, has been reduced from ₹15,510 crore in FY 2024-25 to ₹12,118 crore for FY 2025-26. Similarly, funding for PSUs and joint ventures has decreased from ₹27,570 crore in FY 2024-25 to ₹22,444 crore in FY 2025-26.

The Railway Minister, Ashwini Vaishnaw, explained that the overall capex (capital expenditure) for the sector remains steady, at ₹2.52 lakh crore of the total ₹2.65 lakh crore allocation, which includes public-private partnership investments. He emphasized that new railway projects, valued at ₹4.6 lakh crore, are being planned for the future, focusing on the development of new lines, station redevelopment, and increased freight and passenger services.

The Budget also includes a significant reduction in funding for the Dedicated Freight Corridor Corporation of India, which is a PSU under Indian Railways. The allocation for the project has been cut down from ₹5,499 crore in FY 2024-25 to ₹500 crore in FY 2025-26.

In other developments, the Indian Railways is set to achieve 100% electrification of its network in FY 2025-26. The Railways Minister also highlighted progress on the Bullet Train project, with a reduced allocation of ₹19,000 crore for FY 2025-26. The government aims to manufacture 100 non-AC Amrit Bharat trains, 50 NAMO Bharat trains for city connections, and 200 Vande Bharat trains, enhancing passenger services across India.

India’s Railway Sector Set for Major Overhaul with New Trains, Coaches, and Infrastructure Projects in FY 2025-26 Budget

Railway Stocks Tumble Post-Budget Announcement India’s railway sector is set to undergo a significant transformation, with plans to introduce 200 Vande Bharat trains, 100 Amrit Bharat trains, 50 Namo Bharat rapid trains, and 17,500 general non-AC coaches over the next two to three years. The government has allocated ₹2.52 lakh crore for Indian Railways in FY 2025-26, which will help fund these ambitious projects.

Railways Minister Ashwini Vaishnaw highlighted that the new trains and modern coaches would primarily benefit the middle class. He emphasized that the budget focuses on infrastructure development, with ₹4.60 lakh crore earmarked for railway projects, and safety improvements, including ₹1.16 lakh crore to enhance railway safety.

The minister also noted that the budget will create employment opportunities and reduce the income tax burden for the middle class. Indian Railways plans to mobilize an additional ₹3,000 crore from internal resources to support these initiatives.

Other key allocations include ₹2,739.18 crore for reimbursing losses on strategic railway lines and ₹706 crore for debt servicing of market borrowings for national projects. The budget also outlines a net revenue expenditure of ₹3,02,100 crore for Indian Railways in FY 2025-26, up from ₹2,79,000 crore in the previous fiscal year.

In terms of sustainability, the government aims to achieve 100% electrification of the railway network by the end of FY 2025-26. Additionally, India plans to establish a 7,000 km high-speed rail network capable of supporting speeds of 250 km/h by 2047.