IRCTC, IRFC, RVNL, Jupiter Wagons: Will railway stocks rally ahead of Union Budget 2026?

Samco Securities in a fresh note on Monday said railway stocks have delivered a consistent pre-Budget rally over the past five years, with returns strengthening steadily from one week to five weeks ahead of the Union Budget. The brokerage said the pattern reflected rising investor expectations of continued government focus on railway infrastructure, safety upgrades and capacity expansion.

Samco’s analysis showed that several railway-linked stocks generated improving average returns as Budget day approached. RVNL stood out as the strongest and most consistent performer, delivering nearly 30 per cent average returns five weeks ahead of the Budget, with a 100 per cent probability of positive returns across most timeframes. IRFC also showed sharp momentum, particularly three to five weeks before the Budget, with average return exceeding 20 per cent and win ratios rising to 100 per cent in the longer pre-Budget window.

Wagon and equipment manufacturers also demonstrated a clear pre-Budget acceleration. Jupiter Wagons recorded average gains of about 20 per cent five weeks before the Budget, with an 80 per cent win ratio, while Texmaco posted average returns of nearly 15 per cent over the same period, supported by improving probabilities of positive returns. Titagarh Rail Systems showed relatively moderate average returns of around 9 per cent five weeks ahead of the Budget, but with a consistently high win ratio of 80 per cent, indicating steady participation rather than sharp spikes.

Among railway service and technology players, RailTel delivered average gains of nearly 13 per cent five weeks before the Budget, with win ratios improving as the Budget approached. IRCTC showed lower average returns of about 4–5 per cent in the same window, but stood out for its consistency, posting a 100 per cent win ratio five weeks ahead of the Budget, indicating dependable pre-Budget strength despite modest upside.

Samco said the trend was not limited to returns alone. The probability of positive returns increased meaningfully as the pre-Budget window expanded from one week to five weeks, reinforcing the view that the rally represented a recurring seasonal phenomenon rather than a one-off spike. The brokerage added that investors appeared to be increasingly pricing in railway-focused announcements well ahead of the Budget, reflecting the sector’s growing strategic importance.

Fundamentally, Samco said the optimism was well supported. Railway fares had been increased for the second time in the current year and only the third time in the past five years, marking a shift towards revenue rationalisation. Higher passenger and freight realisations were expected to improve internal cash generation for Indian Railways, reduce reliance on budgetary support and enable sustained capital expenditure.

The brokerage said the upcoming Budget could prioritise railway safety upgrades, including higher allocations for modern wagons, signalling systems and the Kavach anti-collision platform. Dedicated freight corridors, logistics corridors and network decongestion projects were also likely to remain in focus, supporting the medium-term outlook for railway ecosystem companies.