RVNL, HAL, BHEL, Ircon, BEL, IRFC: Railways, defence & capex stock bleed today. Here's why

Infrastructure related stocks took a heavy beating on Saturday after the Finance Minister Nirmala Sitharaman did not announce any big measures for the capex target, which was moved marginally for FY26. Interestingly the FM did not even once mention two key physical infrastructure sectors—rail and road in her speech on Saturday.

The expenditure budget for FY26 with almost flat capex allocation to these two sectors. The budgetary allocation to the Ministry of Railways for FY26 has been pegged at Rs 255,445, while the roads and highways budget saw a 3 per cent increase with allocation of Rs 287,333 crore for FY26. This move is seen as a dampener for the capex related counter which plunged up to 10 per cent on the budget day.

Apurva Sheth of SAMCO Securities also felt the modest increase in capex outlay to Rs 11.2 lakh crore in FY26 from Rs 11.11 lakh crore in the ongoing financial year was much lower than expectations.

"The government's focus until now was on infrastructure and capex seems to be taking a hit due to political compulsions and freebie politics. With this modest increase the railways, defense, infrastructure and engineering is likely to take a hit. On the other hand, FMCG, auto, and consumer durables are likely to be in the limelight going forward," he said.

Shares of Texmaco Rail Engineering, Jupiter Wagons and Titagarh Rail Systems cracked up to 6-10 per cent for the day. IRCON International, Indian Railway Finance Corporation and Rail Vikas Nigam settled 7-10 per cent lower, while Indian Railway Catering and Tourism Corporation and RITES were down 3 per cent for the day.

Road and construction related counters like NCC tanked 8 per cent the day. Other counters including NBCC, PNC Infratech, GR Infraproject, IRB Infra and others cracked 2-5 per cent for the day. Capital Good counters including ABB India, Siemens, BHEL, Larsen & Toubro BEML, Azad Engineering and others tanked 3-6 per cent each.

Defence counters also ended bleeding post the budget announcement. Mishra Dhatu Nigam, Apollo Micro Systems, Paras Defence and Data Patterns tumbled 5-9 per cent each. Bharat Electronics, Hindustan Aeronautics and Bharat Dynamics dropped 4 per cent each for today.

Pankaj Pandey, Head of Research at ICICI Direct said the Union Budget 2025-26 was clearly a confluence of consumption push through personal income tax benefit and capex moderation, with fiscal prudence taking precedence over growth.

"We note that FY26 capex allocation of Rs 11.2 lakh crore, growth of 9.8 per cent YoY over FY25RE is a bit modest, albeit, clearly reflects the government commitment towards fiscal prudence, despite growth moderation. To encapsulate, given the consumption focused budget, we might see pickup in consumption pockets given the tax relief, while capex space is likely to witness only a selective move, ahead," he said.