Railway stocks succumb to selling pressure for 2nd day post Budget; RVNL, IRFC, RailTel, down over 5-7%

Shares of government-owned railway firms, including Rail Vikas Nigam (RVNL), Indian Railway Finance Corporation (IRFC), IRCON International, and RailTel Corporation fell by as much as 6% on Monday, February 3, as the downward trend in these stocks persisted following the Union Budget announcement on Saturday.

In an unexpected turn, the Union Budget failed to provide any specific announcements regarding railway stocks, leaving investors disappointed.

Although the capital expenditure for the financial year 2025-26 (FY26) saw an increase of nearly 10% to ₹11.2 lakh crore from ₹11.11 crore in the previous year, the budget allocation for the railway sector has not changed. As per the Budget document, the allocation for the railways sector remains steady at ₹2.55 lakh crore for FY26. This figure was also ₹2.55 lakh crore in the last financial year.

There were strong market expectations that the government would enhance the capital expenditure for the railway sector, but this did not come to pass.

Railway stocks experienced a significant rally following the announcement in the Economic Survey 2025 regarding substantial growth plans for Indian Railways in FY25.

The survey indicated that the expansion of the railway network is on track to match last year's pace, and there's been a remarkable increase in the addition of rolling stock. Specifically, between April and October 2024, 17 new pairs of Vande Bharat trains were launched, leading to the production of a total of 228 coaches.

“Railway stocks continue to head down due to disappointment from FM Sitharaman as the budget did not mention any major reforms for the sector. Sector as well as stocks were on high hopes of raise in allocation in railway infrastructure and upgradation. I believe the government has kept the agenda out of the budget announcement as we have seen it last FY2025. The near-term trend would continue to be in the negative range. Hence, we recommend conservative investors to wait and watch until the sentiment settles down,” said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.

Another factor contributing to the decline in these stocks today is the prevailing negative sentiment across global equity markets. This shift follows US President Donald Trump's announcement of tariffs on Canada, China, and Mexico over the weekend, which has sparked concerns about a potential tariff war. Investors are reacting to the uncertainty this news brings, leading to a broader sell-off in stock markets.

Railway stocks fall post budget 2025

Rail Vikas Nigam share price slumped 7.3% in Monday's session. The stock opened at ₹414.20 apiece on the BSE. It touched an intraday high of ₹420 apiece and an intraday low of ₹401.80 per share.

IRFC share price plunged 7.3% on Monday, with the stock opening the session at ₹137.40 apiece on the BSE. The stock touched an intraday high of ₹139.25 apiece and an intraday low of ₹133.45 per share.

RailTel share price slipped 7.3% on Monday. The stock opened at ₹368.80 apiece on the BSE. It touched an intraday high of ₹373.55 apiece, and an intraday low of ₹352.55 per share.

IRCON International share price dropped 7.3% on Monday. It opened at ₹192.20 apiece on the BSE and touched an intraday high of ₹198.45 apiece and an intraday low of ₹189.40 per share.

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