Railway Stocks Climb on Fare Revision Boost: IRCTC, RVNL, Texmaco Rally up to 4%

Railway sector stocks witnessed a broad-based rally on June 25, 2025, following the Indian Railways’ announcement of its first passenger fare revision in several years. Texmaco Rail & Engineering, Indian Railway Catering and Tourism Corporation (IRCTC), Rail Vikas Nigam Ltd (RVNL), Jupiter Wagons, and Titagarh Rail Systems were among the notable gainers, with Texmaco Rail increasing up to 4%.

Key Updates and Market Reaction

The fare adjustment, effective from July 1, 2025, introduces a marginal increase-1 paisa per kilometre for non-AC Mail and Express trains and 2 paise per kilometre for AC classes. While the hike is modest, it signals a shift in the government’s pricing strategy and is expected to boost revenue streams for the national transporter. Investors viewed this as a positive for companies supplying rolling stock, wagons, and ancillary services to the railways.

Texmaco Rail & Engineering’s shares opened at ₹165.10 and rallied sharply, touching an intraday high of ₹175.44, at present, it is trading 3.83% higher at ₹172.80. The stock’s trading volume rose, reflecting strong investor interest. Other railway-linked stocks also posted gains: IRCTC rose 0.77% to ₹767.90, RVNL climbed 0.39% to ₹399.55, Jupiter Wagons advanced 0.99% to ₹382.75, and IRCON International added 0.72% to ₹202.33.

Fare Revision to Support Capex and Service Modernisation

The Railway Ministry’s decision to revise passenger fares across select categories is seen as a step toward improving cost recovery and supporting capital expenditure for modernising infrastructure. The move comes at a time when Indian Railways is looking to enhance service quality, reduce subsidy burden, and increase private sector participation. Analysts believe the fare restructuring is likely to positively impact revenues for PSU-linked railway firms engaged in infrastructure, rolling stock, and tech-enabled passenger services.

The fare hike is expected to impact millions of daily commuters and long-distance travellers, but its effect on overall railway revenue is likely to be incremental. However, the policy shift is being interpreted by the market as a sign of the government’s willingness to take tough but necessary decisions to strengthen the financial health of the railways.

Positive Sentiment on Long-Term Railway Capex Plans

The rally also reflects broader optimism around the government's long-term investment roadmap for Indian Railways. With an increasing focus on high-speed rail corridors, electrification, station redevelopment, and Make in India rolling stock manufacturing, railway-focused companies are expected to see sustained order inflows. Companies like Texmaco Rail and Jupiter Wagons, which are involved in wagon manufacturing and rail engineering, are viewed as potential beneficiaries of this ongoing capex cycle.

Investor Outlook Strengthens Ahead of Budget

With the Union Budget 2025-26 around the corner, market participants are positioning ahead of potential policy announcements related to transport infrastructure. Expectations of increased allocations to the railway sector and continued focus on privatisation, monetisation of assets, and digital transformation have strengthened the outlook for railway stocks.

Conclusion

The Indian Railways’ first fare hike in years has injected fresh momentum into railway-linked stocks, with Texmaco Rail & Engineering, IRCTC, RVNL, and others recording notable gains. The move signals a shift in pricing policy and is expected to support future investments in rail infrastructure. As the government continues to prioritise railway modernisation, the sector is likely to remain a key beneficiary of policy tailwinds and investor interest.

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