Rail stocks jump up to 13%; Titagarh, Jupiter Wagons lead on capex and budget optimism

Shares of Indian rail stocks saw a strong rally on Wednesday, with investors showing optimism over the potential recovery in capital expenditure (capex) by the central government in the second half (H2) of the fiscal year. The expectation that the upcoming Union Budget will bring more favourable announcements has further fueled the positive sentiment surrounding the railway sector.

Key stocks on the rise

Titagarh Rail Systems led the surge, gaining approximately 9 per cent. Other notable gainers included Texmaco Rail, which saw a rise of 6 per cent, while RailTel, IRFC, IRCON, and RVNL—public sector undertakings (PSUs)—traded 4-5% higher. The rally in these stocks extended to railway and related companies, with up to a 13% jump in share prices during intra-day trading on the Bombay Stock Exchange (BSE).

Stocks such as Jupiter Wagons, Titagarh Rail Systems, and Texmaco Rail & Engineering saw gains between 5 and 13 per cent. Jupiter Wagons, for instance, surged 13 per cent to Rs 559.60, bolstered by a six-fold jump in trading volumes. The combined trading volume of Jupiter Wagons across both the NSE and BSE reached 9.53 million equity shares.

Growth prospects for Indian Railways

Indian Railways is undergoing an era of growth, driven by several government-led initiatives and private-sector investments. The construction of new freight corridors, along with government schemes such as the General-Purpose Wagon Investment Scheme (GPWIS) and the Liberalized Special Freight Train Operations (LSFTO), has provided significant momentum to the sector. With these developments, private sector investments are expected to continue flowing into the railway sector.

The Indian government has outlined an ambitious Rs 2.62 trillion capital outlay for FY25, marking a 2.7 per cent increase from FY24. Around 452 railway projects are in various stages of planning or execution, covering 49,323 kilometers and with a combined cost of approximately Rs 7.33 trillion. These projects include new railway lines, gauge conversions, and doubling of tracks.

Strategic initiatives driving growth

One of the key strategic programs boosting the sector is the PM Gati Shakti program, which involves three major economic corridors: the East-Coast, East-West, and North-South sub-corridors. These corridors, spanning over 4,200 kilometers, are expected to further increase the demand for freight and passenger transport, adding to the positive outlook for railway stocks.

The implementation of the Production Linked Incentive (PLI) scheme for train parts and the redevelopment of railway stations are expected to play a pivotal role in shaping the future of the Indian railway sector, positioning it for unprecedented growth.