RailTel, IRCON, IRFC, RVNL: Railway stocks rally up to 8%, here's why

Shares of railway public sector undertakings (PSUs) including RailTel Corporation of India, IRCON International, Rail Vikas Nigam (RVNL), and Indian Railway Finance Corporation (IRFC) rose on Monday amid heavy trading volumes. RailTel and IRCON both gained 7.7%, while RVNL climbed over 4%. IRFC shares traded 2.6% higher at Rs 129.59. Trading volumes were notably elevated, with over 1 crore shares exchanged for each of RailTel, IRCON, and RVNL in just two hours, far surpassing their respective 20-day averages. "RailTel informed the exchanges that it has received the Letter of Acceptance (LoA) from the State Project Director of the Bihar Education Project Council."

Additionally, "the company had also confirmed the receipt of multiple other orders, which were close to Rs 1,000 crore in value."

RVNL emerged as the lowest bidder for a Rs 169 crore project from West Central Railway, with a completion timeline of 540 days. Among non-PSU railway stocks, Jupiter Wagons won a Rs 113 crore order for the supply of 9,000 LHB Axles. "Ordering activity has picked up among railway constituents after Railways Minister Ashwini Vaishnaw mentioned that projects worth Rs 77,000 crore are being implemented in the North-east."

Over the weekend, Prime Minister Narendra Modi inaugurated the Bairabi-Sairang railway line in Mizoram and additional projects valued at Rs 8,500 crore in Manipur. "

The recent uptick in order awards and government-backed initiatives has reinforced optimism in the railway sector. The surge in trading volumes and price momentum reflects investor confidence in continued infrastructure development. RailTel's receipt of sizable orders and RVNL's competitive project wins bolster their order books, while IRFC's steady gains point to favourable market sentiment. The combination of robust execution pipelines and policy-driven projects is expected to maintain traction for these railway stocks as further government spending unfolds in the coming quarters.