- Why are Railway stocks rising today?
- Key takeaways
India’s railway sector is picking up speed in the markets, as today (May 16, 2025), investors witnessed a significant rally in railway sector stocks. The rally was led by RVNL, Titagarh Rail, Jupiter Wagons, RailTel, Ircon International, and more, driven by significant developments in key public sector undertakings (PSUs). Let’s understand in detail why railway stocks are rising.
Why are Railway stocks rising today?
On May 16, 2025, several stocks related to the Indian railways experienced significant gains, driven by a combination of new contract wins, government approvals, and positive market sentiment. Here's a concise summary for each:
Titagarh Rail Systems
The share price of Titagarh Rail, a manufacturer of trains for the Indian Railways, surged as much as 14.14% to ₹924.4 (day’s high) today, as compared to the previous close of ₹809.05 per share. In the last 5 days, the stock has surged over 25%.
The share gain was largely driven by the company's strong order book and future growth potential. As of December 2024, its order book includes ~13,689 wagons and 1,589 Metro and Vande Bharat coaches, amounting to ₹25,333 crore, which is equivalent to 6.2 times its estimated FY25 sales.
These orders consist of ₹6,846 crore for Passenger Rolling Stock Breakup, ₹5,161 crore for Freight Rolling Stock Breakup, ₹6,300 crore for Wheelsets with Ramakrishna Forgings Ltd, and ₹7,026 crore for the Vande Bharat with BHEL. The strong orderbook and revenue potential attracted a healthy trading volume in the past few weeks, leading to a notable increase in the share price.
Rail Vikas Nigam Ltd (RVNL)
RVNL’s share price rose around 11% today to a day’s high of ₹417.5 per share. This gain was mainly due to a contract win worth ₹159.79 crore from the Central Railway.
The contract involves Overhead Equipment (OHE) modification work for upgrading the existing 1x25 kV electric traction system to a 2x25 kV system at the feeding section between Itarsi and Amla in the Nagpur Division of Central Railway. This simply means that the company is upgrading the electrical wires and supporting structures that supply electricity to electric trains.
This upgrade is aimed at supporting the enhanced loading target of 3,000 metric tonnes (MT) and is scheduled to be completed within 24 months. The company is a PSU that focuses on developing and implementing rail infrastructure projects.
Indian Railway Finance Corporation (IRFC)
IRFC, the funding arm of Indian Railways, saw its stock gain 7.66% today to ₹140.22 per share from its previous close of ₹130.24. The gains come on the back of the government’s approval to raise up to ₹10,000 crore through zero-coupon deep-discount bonds.
For context, zero-coupon deep-discount bonds don’t pay any interest over their life and are sold at a significantly lower price than their face (maturity) value.
The maturity of the bonds is 10 years, and they will be issued at a discount of ₹4,916 crore to their face value. The issuance is mandated to be completed by March 2027.
Ircon International
The company is a Government of India Undertaking under the Ministry of Railways and is engaged in engineering & construction operations. Its share price gained 8.35% today to ₹192.4 in comparison to a previous close of ₹177.58 per share. As of now, its market capitalization is around ₹17,600 crore.
The surge in Ircon International's share price was driven by a work order from North Western Railway for implementing a Remote Diagnostic & Predictive Maintenance System across multiple sections, including RE-MD (Jaipur Division), MD-PNU (Ajmer Division), RE-BTI (Bikaner Division), and MTD-LUNI (Jodhpur Division). This is a technology-driven system used to monitor and maintain railway infrastructure and rolling stock, like trains and wagons.
The order is valued at ₹51.62 crore and is scheduled to be completed within 24 months.
Additionally, stocks including BEML Ltd (major supplier of rolling stock), IRCTC (handling catering, tourism, and online ticketing for Indian Railways), Jupiter Wagons (manufacturer of railway wagons, containers, and braking systems), Texmaco Rail & Engineering (manufacturer of railway wagons, EMUs, and infrastructure services provider), and Container Corporation of India (a public sector logistics company that transports freight using the Indian Railways network) also surged as a part of broader market volatility and sector-wide optimism.
To explore top railway stocks to buy in 2025, visit here.
Key takeaways
The Indian railway sector saw a sharp rise driven by a mix of government approvals and contract awards aimed at infrastructure expansion. RVNL and Ircon International received significant orders from Central Railway and the North Western Railway, respectively, which signals a continued focus of the government towards investment in railway infrastructure. Titagarh Rail gained over 14% on the back of a robust order book valued at ₹25,333 crore, while RVNL rose 11% following a ₹159.79 crore contract for traction system upgrades. IRFC share climbed nearly 8% after receiving government approval to raise ₹10,000 crore through zero-coupon, deep-discount bonds.
These key orders and fundraising, like electrification upgrades, increased freight handling capacity, and implementation of advanced diagnostic systems, highlight the sector's focus on expansion plans.
Adding to this, the government had also made the highest-ever capital allocation of ₹2.65 lakh crore during the announcement of the Union Budget 2025-26. The budget is aimed at accelerating infrastructure development and modernization, along with expanding railway lines, tracks, and upgrading safety systems. The government’s continuous support and focus on expansion have strengthened the trust of investors in the railway sector, leading to a widespread rally in railway stocks.
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