RVNL, RailTel, IRFC, Texmaco Rail, IRCTC shares rally up to 13%; here’s why

Railway-linked stocks, including Rail Vikas Nigam (RVNL), RailTel Corporation of India (RailTel), Indian Railway Finance Corporation (IRFC), Texmaco Rail & Engineering, and Indian Railway Catering & Tourism Corporation (IRCTC), rallied up to 13 per cent in Friday’s trade. The sharp uptick signals a return of investor interest to the sector after months of subdued performance.

Shares of RVNL surged as much as 13.21 per cent to hit Rs 391.40 on the BSE from its previous close of Rs 345.70. Despite the day’s gain, the counter remains down 9 per cent year-to-date in 2025.

Buying momentum was visible across the board. RailTel shares jumped 8.11 per cent to trade at Rs 385.45 compared to a previous close of Rs 356.55, while the heavyweight financing railway arm IRFC rose 8.65 per cent to Rs 131.95. 

Among other major movers, Texmaco Rail gained 4.47 per cent to hover at Rs 140.10, and catering major IRCTC traded 3.79 per cent higher at Rs 705.30.

Why are railway stocks rising?

The primary trigger for the rally is the implementation of new passenger fares which came into effect today. This marks the second revision in a year, following an earlier hike in July.

 In a press release, the government said that the railways has rationalised its passenger fare structure with the specific objective of balancing affordability for passengers and sustainability of operations. 

In the second-class ordinary category, “there is no increase in fare for journeys up to 215 km, ensuring that short-distance and daily commuters are not impacted,” the release said. However, the structure changes for longer hauls. For distances between 216 km and 750 km, the fare increases by Rs 5. For extended travel, the hike is applied in steps: “Rs 10 for distances between 751 km and 1250 km, Rs 15 for distances between 1251 km and 1750 km, and Rs 20 for distances between 1751 km and 2250 km,” it added.

While fares for suburban services and season tickets remain unchanged to protect daily commuters, the revision for Mail/Express trains has been rationalised at 2 paise per kilometre across classes, a move investors view as a step toward improving the financial health of the national transporter, it said.

Beyond the fare revision, market sentiment has turned constructive ahead of the Union Budget 2026. Railway-linked stocks typically see heightened investor interest in the run-up to the Budget, largely on expectations of stepped-up capital expenditure.