IRFC shares surge over 9% amid broader rally in railway stocks ahead of Budget 2024

The IRFC stock rallied as much as 9.4% on Monday to hit a fresh 52-week high of ₹206 on the National Stock Exchange of India (NSE). Other railway stocks, like Rail Vikas Nigam Ltd, climbed 12%, Ircon International Ltd was up 5%, and Indian Railway Catering and Tourism Corp Ltd rose 2%.

The rally came as Union Minister of Railways Ashwini Vaishnaw on Friday announced major expansion plans for Indian Railways while addressing a gathering during a ceremony in Rail Bhavan.

To meet the growing demand for rail services, the Indian Railways announced plans to produce approximately 10,000 non-air-conditioned (non-AC) coaches over the next two years.

Media reports said that the ministry planned to roll out 4,485 non-AC coaches in the ongoing financial year (2024-25) and another 5,444 in FY 2025-26.

The railways minister reiterated on Friday that Indian Railways remained committed to providing affordable rail travel to the poor, lower middle class, and middle class.

Earlier this year, Vaishnaw had also announced the production of 50 new Amrit Bharat Trains, a high-speed and luxury train service.

The sentiment around railway stocks has been positive for the past few sessions, ahead of the July 23 announcement of the full Union Budget for 2024-25.

The government, in the Interim Budget, allocated ₹2.55 lakh crore to the Indian Railways for fiscal 2024-25, a 5.8% increase over the previous year.

Finance Minister Nirmala Sitharaman also announced the implementation of three major economic railway corridor programmes: energy, mineral, and cement corridors, which focus on the efficient transportation of critical resources. Port connectivity corridors, meanwhile, aim to enhance connectivity to major ports for streamlined logistics.

Shares of IRFC were trading 6.84% higher at ₹201.11 apiece on the NSE at 2:05 pm.