Railway Stocks: For nearly a year, railway stocks were stuck in a long and painful downturn, leaving investors frustrated and uncertain. But just when the tracks looked rusty, the sector has staged a sharp rebound. Shares of RVNL, Titagarh Rail, Jupiter Wagons, and several others have suddenly come alive, powered by the government’s steady capital expenditure push and a stream of fresh order wins.
Yet, beneath the excitement, there are questions that investors can’t ignore: Is this revival strong enough to sustain, or just a temporary detour before another slowdown?
The Rebound on the Tracks
Over the past week, railway counters that had been bleeding for months suddenly reversed course. Titagarh Rail, Ircon International, RailTel, RVNL, Jupiter Wagons, and IRFC all surged between 4% and 13%. This comes after a bruising one-year stretch where many of them had lost between 16% and 38%.
The revival was helped by valuations cooling off after last year’s relentless fall. For instance, Texmaco Rail now trades at 17x forward earnings against its five year average of 23x, while Titagarh Rail is at 34x compared to its 42x average. But RVNL, still trading at a lofty 48x against its 18x long term average, reminds investors that not all stocks are attractively priced yet.
Government Capex and Fresh Orders Fueling Optimism
What has lifted sentiment is the government’s unwavering capital expenditure on railways. Between April and July 2025 alone, the Railway Board spent Rs79,152 crore the highest among large CPSEs and agencies. For FY26, the Centre has allocated Rs2.6 lakh crore towards railways, matching last year’s spending and reaffirming policy commitment.
The order book is also buzzing. Texmaco Rail bagged a Rs129 crore order for traction overhead equipment, Jupiter Wagons won a Rs113 crore deal for 9,000 axles, and RailTel secured a Rs210 crore project under the Bihar Education Project. These wins have reassured investors that capex is translating into real business opportunities.
Analysts Remain Skeptical
Despite the rally, experts are cautious. Aishvarya Dadheech, CIO at Fident Asset Management, believes this is a short-lived spurt rather than a fresh bull run. He argues that while defence offers a stronger growth story, railways still look expensive and lack meaningful alpha.
Independent market expert Ambareesh Baliga echoes similar concerns, saying that order inflows were never the problem execution is. Unless companies deliver consistently on their large order books, the optimism could fade.
Brokerages also reflect this caution. While Titagarh Rail has seen more “buy” calls compared to last year, most other stocks like RailTel, IRFC, and RVNL are weighed down by “hold” and “sell” recommendations.
The Road (or Track) Ahead
The recent rally may feel like a long awaited turnaround, but Q1 FY26 earnings highlighted the sector’s uneven fundamentals. RVNL’s profit slumped 40% year on year, Ircon’s revenue fell nearly 22%, and RITES managed only flat growth. Though RailTel and IRFC reported double digit profit gains, overall, execution challenges and cost pressures are far from over.
Railway stocks may have picked up steam, but whether they are on a long journey ahead or just taking investors for a short ride remains to be seen. For now, the rally feels more like a sentiment driven bounce rather than a clear rerating of the sector.
Disclaimer: This article is for informational purposes only. The views expressed here are based on market trends and expert opinions. Investors are advised to consult certified financial advisors before making any investment decisions.
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