India’s Railway stocks have witnessed a strong resurgence after months of underperformance, with the sector adding more than ₹66,500 crore in market capitalisation over the last five trading sessions. The rally reflects renewed investor optimism ahead of the Union Budget and improving revenue signals from Indian Railways.

The sector had remained under pressure for much of 2025 after peaking in July 2024. Elevated valuations, profit booking, and tempered expectations of policy support had led to a prolonged correction. The recent rebound, however, indicates a gradual return of confidence as investors reassess long-term infrastructure prospects.

Leading the recovery, Jupiter Wagons surged nearly 37 percent in just five sessions, emerging as the top gainer. Rail Vikas Nigam Limited (RVNL) climbed around 27 percent, while Indian Railway Finance Corporation (IRFC) advanced over 20 percent, highlighting renewed interest in railway financing and execution-focused companies.

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Several other railway-linked stocks also posted strong gains. Shares of Ircon International, Titagarh Rail Systems, RailTel Corporation, Texmaco Rail & Engineering, RITES, and BEML rose sharply, many recording double-digit increases. Despite the rally, most of these stocks are still trading below their previous highs.

A key trigger behind the surge has been Indian Railways’ decision to revise passenger fares effective December 26. This marks the second fare hike in FY26, with long-distance travel fares increased by 1–2 paise per kilometre across ordinary, Mail, and Express trains, while suburban services remain unaffected.

The fare hike is expected to generate nearly ₹600 crore in additional revenue for the remainder of the financial year. With passenger services operating at an estimated 45 percent loss, largely offset by freight earnings, the revision is seen as a step toward improving financial sustainability and strengthening the sector’s revenue outlook.

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