IRFC, RVNL, BEML, Or IRCTC; Can Budget 2025 Trigger Fresh Buying In Railway Stocks?

Railway Stocks: Indian Railways-backed PSU stocks are back in focus with the expectation of an increase in Budget allocation for FY26 by FM Nirmala Sitharaman on February 1, 2025. Expert predicts a 15-18% boost to the railway sector in allocations. Accordingly, IRFC, RVNL, IRCTC, BEML, RITES, and ConCor among other railway stocks will be trending going ahead.

What To Expect In Budget On February 1:

Manish Chowdhury, Head of Research, StoxBox said, "We anticipate the government to boost the railway sector budget, with an anticipated 15-18% increase in allocation for this segment. In the 2024-25 budget, Rs. 2,62,200 crores were allocated to the railway sector, emphasizing passenger safety with the implementation of the Kavach anti-collision system and infrastructure development."

As part of this initiative, Chowdhury added that the Ministry of Railways plans to equip 10,000 train engines with armour protection systems and additionally operate on 5,000-5,500 kilometres of track annually over the next two years. The government is also integrating AI into operations like ticketing and monitoring track conditions to improve efficiency and safety. The introduction of new Vande Bharat and Amrit Bharat trains is expected, alongside an expansion of the Amrit Bharat Station Yojana, a scheme aimed at modernizing 1,275 railway stations with enhanced passenger amenities and contemporary designs. The Namo Bharat Corridor in Delhi represents a significant leap forward, helping to reduce congestion and pollution.

For FY25, FM Nirmala Sitharaman had increased budget allocation for railway sector to a new record high of Rs 2,65,000 crore during Budget 2024. This was higher from the budget allocation of Rs 2,40,000 crore for FY24.

So far, the government has spent about 76% or Rs 1,92,446 crore of the FY25 budget allocation.

" To further enhance railway infrastructure, the budget is likely to include new orders for rolling stock, freight coaches, and wheels. Additionally, the government's push towards the Make in India initiative could create new opportunities for railway equipment manufacturers. From a budget perspective, the outlook for the railway sector remains positive, with RVNL, BEML, and IRFC identified as top picks," Chowdhury said.

Railway Stocks In India:

1. Indian Railway Finance Corporation (IRFC):

IRFC was a banger in 2023 and the first half of 2025, however, corrected sharply to end below Rs 150 levels by December 2024. The start of January 2025 has been bearish as well. With the current market price of Rs 142 apiece, IRFC is down by 6% YTD on NSE, and the stock has nosedived by 38% from its 52-week high of Rs 229 apiece that was recorded on July 15, 2024. Despite the current short-term correction, IRFC is still the largest railway stock with an m-cap of Rs 1,85,572.79 crore.

IRFC is a Schedule 'A' Public Sector Enterprise under the administrative control of the Ministry of Railways, Govt. of India. It is also registered as a Systemically Important Non-Deposit taking Non Banking Financial Company (NBFC - ND-SI) and Infrastructure Finance Company (NBFC- IFC) with the Reserve Bank of India (RBI).

In more than 30 years of existence, IRFC has played a significant role in supporting the expansion of the Indian Railways and related entities by financing a significant proportion of its annual plan outlay.

2. Rail Vikas Nigam Limited (RVNL):

Unlike IRFC, RVNL floats in the green zone but with marginal upside YTD. Currently, at Rs 429.90, RVNL shares have nosedived by 33.6% from its 52-week high of Rs 647 apiece which was also recorded on July 15 last year.

RVNL has an illustrious legacy spanning over more than two decades. It started with the objective of bridging the infrastructure gap in Indian Railways by fast-track execution of Railway projects.

3. BEML:

Currently, BEML share price is at Rs 3,499.95 apiece on NSE, which is down by over 15% year-to-date. Its market cap is around Rs 14,575.37 crore.

BEML Limited is a leading multi-technology 'Schedule A' company under the Ministry of Defence, which plays a pivotal role in serving India's core sectors like Defence, Rail, Power, Mining and Construction by offering world-class products. BEML operates in three verticals viz.

4. IRCTC:

This railways catering services giant, IRCTC is currently at Rs 764 apiece, which is down by 3.2% YTD. The stock's 52-week high and low are at Rs 1,138.90 and Rs 736.30 apiece respectively.

Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) is a Schedule 'A' Mini-Ratna listed company under Ministry of Railways, Government of India and is the professional hospitality and travel arm of Indian Railways incorporate for the upgradation of catering services over Indian Railways and promotes rail-bound domestic and inbound tourism in the country.

Other Railway stocks that will be in focus due to Budget are IRCON International, Container Corporation, RITES, RAILTEL Corp, Texmaco Rail, and Titagarh RailSystems.

Could Budget Trigger Buying Sentiment For Railway Stocks?

As per ICICI Direct's report, if you look at historical data, Public sector undertakings (PSUs) in the railway domain have consistently outperformed benchmark indices since their listings post-2018, delivering impressive returns to investors. One of the reasons for this is higher capital allocation towards the sector.

Further, the brokerage highlighted that Experts believe effective utilization will be critical to realizing the ambitions we have covered in the previous section. Efficient execution could significantly benefit railway-related companies and contribute to robust growth in the sector.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.