Railroad stocks jump as much as 13%; Titagarh, Jupiter Chariots lead in capex and budget prospects
Indian railway stocks witnessed a strong rally on Wednesday, as investors expressed optimism over capital expenditure (capex) recovery by the central government in the second half (H2) of the financial year. Expectations that the upcoming Union Budget will bring more positive announcements have fueled the positive outlook for the railway sector.
Key stocks are growing
Titagarh Rail Systems led the surge, gaining nearly 9 percent. Other notable gainers include Texmaco Rail, which saw a 6 percent rise, while RailTel, IRFC, IRCON, and RVNL—public utilities (PSUs)—traded 4-5 percent higher. The rally in these stocks extended to railway companies and related companies, with share prices rising as much as 13% during the trading day on the Bombay Stock Exchange (BSE).
Stocks like Jupiter Rail, Titagarh Rail Systems, and Texmaco Rail & Engineering gained between 5 and 13 percent. Jupiter shares, for instance, rose 13 percent to Rs 559.60, buoyed by a six-fold jump in trading volumes. The combined trading volume of Jupiter Wagons across NSE and BSE reached 9.53 million equity shares.
Growth prospects of Indian Railways
Indian Railways is experiencing a period of growth, driven by several government-led initiatives and private sector investment. The creation of new freight corridors, along with government initiatives such as the General-Purpose Wagon Investment Scheme (GPWIS) and the Free Special Trains Operation (LSFTO), have given a major boost to the sector. With these developments, private sector investment is expected to continue to flow into the railway sector.
The Indian government has projected a fiscal deficit of Rs 2.62 trillion for FY25, marking an increase of 2.7 percent from FY24. About 452 railway projects are in various stages of planning or implementation, covering 49,323 kilometers and a combined cost of Rs 7.33 trillion. These projects include new railroads, gauge changes, and doubling of tracks.
Strategic initiatives that drive growth
One of the key strategic initiatives developing the sector is the PM Gati Shakti initiative, which includes three major economic corridors: East-Coast, East-West, and North-South sub-corridors. These tunnels, covering more than 4,200 kilometers, are expected to continue to increase the demand for freight and passenger transport, adding to the positive outlook of the railways.
The implementation of the Production Linked Incentive (PLI) scheme for railway components and the redevelopment of railway stations is expected to play a significant role in shaping the future of India’s railway sector, positioning it for unprecedented growth.
