IRFC vs RailTel vs RVNL: Which railway PSU stock is better for your portfolio?

Railway PSU stocks, including Indian Railway Finance Corporation (IRFC), RailTel Corporation of India, and Rail Vikas Nigam Ltd (RVNL), have undergone a significant correction from their recent peaks amid substantial selling pressure. While many railway stocks had delivered multibagger returns in the past, they are now experiencing heightened volatility, with several witnessing declines of up to 50% from their highs within a year.

IRFC share price has declined by over 46% from its 52-week high, RailTel share price has plummeted 52% from its peak, and RVNL share price has dropped 47% from its 52-week high.

The sell-off in railway PSU stocks accelerated following the Union Budget, which did not announce any major sector-specific reforms, contrary to market expectations. The Union Budget for FY26 maintained the capital expenditure for Indian Railways at ₹2.52 lakh crore, unchanged from the previous year.

Kotak Institutional Equities expects muted growth in capex without a meaningful improvement in Indian Railway’s capacity to implement larger projects such as high-speed railway networks connecting India’s major cities, akin to the dedicated freight corridors.

“In our view, capex on railway rolling stock (passenger trains and freight wagons) may decelerate further given ongoing additions in the past several years and limited expansion in India’s railway network. The multiples of the listed railway stocks seem quite unreasonable and imply very strong growth in revenues and profits, which seems unlikely,” Kotak Equities said in a report.

IRFC vs RailTel vs RVNL - Which railway stock to buy?

Analysts believe that if the government’s focus remains high on railway infrastructure development, then all the above stocks - IRFC, RailTel Corporation and RVNL - would continue to perform well.

Among these three PSU stocks, Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities believes that for conservative investors, IRFC stands best in terms of its business model which is a dedicated financing arm of Indian Railways.

IRFC primarily funds rolling stock and infrastructure projects by leasing rolling stock and railway projects to Indian Railways, ensuring stable and healthy revenue as well as profitability growth.

“We believe strong government backing along with a low-risk business model with healthy dividend yields on long term gives IRFC a better long term pick. While, if the investors wish to take short term risk for long term investment, we believe RVNL looks a better long term candidate as it is a key player in Indian railways modernization including track laying, electrification, and station modernization,” said Tapse.

A strong order book and consistent revenue growth along with government vision would help RVNL to perform well in the long term. If investors wish to build a balanced portfolio focusing on railways, it is advised to have both stocks in the long term portfolio, he added.

“In terms of long term targets, IRFC share price can deliver targets of ₹170-180 with 12 months investment, while RVNL shares can deliver a target of ₹420 - 450 with 12 months investment period,” Tapse said.

Technicals

Railway stocks have witnessed a healthy correction from their highs and seem to be forming a good support around their swing lows, according to Ruchit Jain, Vice President, Equity Technical Research, Wealth Management, Motilal Oswal Financial Services Ltd.

“Railway stocks are likely forming a support around their swing lows. However, a timewise correction cannot be ruled out, but the downside looks limited. The view on IRFC shares is positive and it can relatively outperform RailTel and RVNL shares. IRFC shares have strong support at ₹115 level. If the stock holds this level, it may rally towards its 200-Day Moving Average (DMA) of ₹140,” Jain said.

According to him, the trend in RailTel shares and RVNL shares may remain sideways.

IRFC

IRFC share price is displaying a consolidation pattern after a sharp decline. The railway stock has found support near the ₹123 – ₹125 zone, where buying interest has emerged. It is currently hovering close to the short-term (20-day) and medium-term (50-day) EMAs, but remains below the 200-day EMA at ₹141.15, indicating that a strong breakout is yet to occur, said Hardik Matalia, Derivative Analyst at Choice Broking.

The Relative Strength Index (RSI) is at 50.04, suggesting neutral momentum with a potential for upside if the stock sustains above key moving averages. A breakout above ₹130 could trigger fresh buying interest, pushing the stock toward the ₹145 – ₹155 range in the near term. On the downside, strong support is placed at ₹120, he added.

RailTel Corporation

RailTel share price is showing a bearish undertone as it struggles to sustain above key moving averages. The stock is trading below the 20-day EMA, 50-day EMA, and 200-day EMA, indicating a weak trend. The Relative Strength Index (RSI) is at 45.48, which signals mild weakness, with no immediate signs of a strong recovery, said Matalia.

According to him, RailTel stock has a crucial resistance zone near ₹310 – ₹315, and only a decisive breakout above this range could indicate a reversal. On the downside, ₹290 serves as the immediate support level. A break below this could lead to further downside. Until a breakout is seen, the stock is likely to remain under pressure.

RVNL

RVNL share price is showing signs of consolidation after a recent decline. The stock is facing resistance near its 50-day EMA, while the 200-day EMA continues to act as a major barrier for any long-term recovery. The RSI is at 47.55, reflecting a lack of strong momentum in either direction. RVNL stock has been struggling to hold above key resistance levels, with ₹355 acting as a near-term hurdle. If RVNL manages to close above this level, an upside moves could be seen, said the Choice Broking analyst.

On the downside, he believes ₹340 serves as a strong support zone, and a break below this could show more extended selling. Until a breakout above the ₹355 – ₹360 zone occurs, the trend remains weak.

Stock to buy

Among the three railway stocks, IRFC stands out as a better buy candidate, according to Hardik Matalia.

“While Railtel and RVNL shares continue to trade below all key moving averages, IRFC share is showing signs of stability near support levels. If IRFC stock sustains above ₹130, it could outperform its peers in the short to medium term. Traders and investors may consider accumulating IRFC at current levels with a stop-loss at ₹120 and an upside target of ₹145 – ₹155,” said Matalia.

Meanwhile, Anshul Jain, Head of Research at Lakshmishree Investment said he remains bearish on all railway stocks.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.