IRFC, RVNL, other railway-linked stocks slide up to 3% after 5 sessions of gains

Shares of railway-linked companies including Indian Railway Finance Corporation (IRFC), Rail Vikas Nigam Ltd (RVNL), and Jupiter Wagons pulled back as muc has 3% on Monday as investors locked in profits after a blistering five-session rally, even as the sector remains in focus following a recent passenger fare hike and rising expectations from the Union Budget.Indian Railway Finance Corporation (IRFC) shares fell as much as 3.1% to Rs 129.30 on the BSE. Rail Vikas Nigam Ltd (RVNL) declined up to 3% to Rs 376.35, while Ircon International slid as much as 2.1% to Rs 175.10. Jupiter Wagons dropped up to 2.9% to Rs 337.40, and Indian Railway Catering and Tourism Corporation (IRCTC) eased 0.5% to Rs 701.60.Profit-taking after sharp rallyThe declines came after a sharp run-up over the previous five sessions, during which railway stocks had surged as investors positioned for higher passenger fares and anticipated increased budgetary support for the sector.In the prior five sessions, RVNL shares climbed from around Rs 306 to Rs 387.25, logging gains of more than 26.50%. IRFC rose from Rs 110.81 to Rs 133.60, delivering returns of over 20%. Ircon International advanced from about Rs 150 to Rs 178.25, a rise of roughly 19%. RailTel Corporation of India and IRCTC also saw strong buying interest during the rally.The pullback reflects near-term profit booking rather than a shift in sentiment toward the sector.Fare hike backdropRailway stocks had been buoyed after the government’s revised passenger train fares came into effect last week, marking the second fare hike in 2025. The move is aimed at balancing passenger affordability with the financial sustainability of railway operations.The Railway Ministry said the revision affects ordinary and mail/express trains, while suburban services and season tickets remain unchanged. “Under the revised fare structure, there is no change in fares for suburban services and season tickets, including both suburban and non-suburban routes. For ordinary non-AC (non-suburban) services, fares have been rationalised in a graded manner across second class ordinary, sleeper class ordinary, and first class ordinary,” the ministry said.For second class ordinary travel, journeys up to 215 km will see no increase, while fares for 216–750 km rise by Rs 5. Longer journeys will see incremental hikes of Rs 10 for 751–1250 km, Rs 15 for 1251–1750 km, and Rs 20 for 1751–2250 km. For sleeper and first class ordinary, fares have been revised at 1 paise per kilometre for non-suburban journeys. Mail and express trains will see a 2 paise per kilometre increase across non-AC and AC classes. “As an illustration, for a 500 km journey in non-AC mail/express coaches, passengers will pay only about Rs 10 extra,” the ministry said.The fare revision applies to trains such as Rajdhani, Shatabdi, Duronto, Vande Bharat, Tejas, Humsafar, Amrit Bharat and others. Tickets booked on or after December 26 reflect the new fares, while earlier bookings remain unaffected.Budget expectations keep stocks in focusThe ministry noted that the previous fare hike in July 2025 has generated Rs 700 crore in revenue to date, underscoring the financial impact of such measures.Railway stocks have also been supported by expectations around the Union Budget 2026–27. According to reports, the FY27 budget may allocate a record Rs 1.3 trillion for rail safety, nearly half of Indian Railways’ capital expenditure, amid concerns over accidents and delays in rolling out protection systems.With the fare hike now in place and budget allocations approaching, investors are expected to keep railway-linked stocks firmly in focus as 2026 begins, even as near-term volatility follows the sector’s sharp recent gains.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)