RVNL, IRFC and other railway stocks tumble up to 7% as Budget 2025 falls short of market expectations

Shares of companies linked to India’s railways sector plummeted for a second day on Monday, February 3, after the Union Budget 2025 failed to provide any fresh impetus to the sector.

After witnessing a sharp selloff in Saturday’s session, shares of both state-run and private railway companies plunged further, to 3-8% on the National Stock Exchange of India (NSE).

In the Union Budget on February 1, Finance Minister Nirmala Sitharaman kept the allocation for the railway sector for the financial year 2025-26 at ₹2.55 lakh crore, the same as the allocation for FY 2024-25.

The funding would be mainly directed towards essential infrastructure projects like track expansion, rolling stock procurement, electrification and station modernisation. The Finance Minister did not announce new trains or routes in her speech.

Meanwhile, analysts expected that the budgetary allocation to the Indian Railways may increase 15-20% for FY 2025-26 to hit record-high levels, considering infrastructure has always been a focus area for this government.

However, experts predict that companies like Titagarh Rail Systems, Jupiter Wagons, and Texmaco Rail are expected to gain from the increased allocation for rolling stock despite the overall outlay remaining unchanged. Plans to buy a higher number of passenger coaches may help the wagon-making companies in the railway sector.