RVNL, IRFC, IRCTC shares rally up to 10% as new railway fares kick in
- 26th December 2025
- 12:00 AM
- 3 min read
Summary
Railway linked stocks rallied sharply on December 26 after revised passenger fares came into effect. Shares of RVNL, IRFC, IRCTC and other rail PSUs gained up to 10% as investors reacted to improved revenue visibility, better operating economics and rising expectations from the Union Budget 2026–27.Mumbai | 26 December
Railway stocks surged on Friday as the government’s revised passenger train fares officially kicked in, lifting sentiment across rail-linked public sector companies. The move marked the second fare rationalisation this year, aimed at easing losses in passenger services while limiting the impact on commuters.
Shares of Rail Vikas Nigam Limited led the rally, rising nearly 13% to around ₹389. Indian Railway Finance Corporation gained close to 9% to about ₹132, while Indian Railway Catering and Tourism Corporation traded nearly 5% higher. Stocks such as Jupiter Wagons and Ircon International also traded in the green.
The gains extended a five-day rally for several railway stocks, helping them trim losses seen earlier in 2025.
What changed on fares
Under the revised structure, passenger fares have been adjusted for non-suburban journeys beyond 215 kilometres. Second-class ordinary fares remain unchanged up to 215 km, with modest slab-based increases for longer distances.
For sleeper and first-class ordinary categories, fares have been revised by one paise per kilometre, while mail and express trains across both non-AC and AC classes now carry a two paise per kilometre increase. Suburban services and season tickets remain unchanged.
According to the Railway Ministry, a 500-kilometre non-AC mail or express journey will cost passengers only about ₹10 more. Tickets booked on or after December 26 reflect the new fares, while earlier bookings are unaffected.
The revision applies across major train categories, including Rajdhani, Shatabdi, Vande Bharat, Duronto, Tejas and other long-distance services.
Why railway stocks rallied?
The fare rationalisation is expected to generate around ₹600 crore in additional revenue during the remaining part of the current financial year. Passenger services currently operate at a loss, with fares estimated to be nearly 45% below cost, supported by freight earnings.
For investors, the move improves revenue visibility and supports efforts to contain losses in passenger operations. It also helps Indian Railways work towards a better operating ratio, which is projected to remain elevated this year.
Budget expectations add support
Railway stocks have also been reinforced by expectations ahead of the Union Budget 2026–27. Market participants are factoring in higher allocations for rail safety and infrastructure, with news reports suggesting a possible record outlay of around ₹1.3 trillion, nearly half of total railway capital expenditure.
Recent order inflows have further supported sentiment. Last week, RVNL received a fresh project award from the Northeastern Railway for bridge construction work, adding to its already strong order book.
With revised fares now in place and budget announcements approaching, railway stocks are likely to stay in focus as the new calendar year begins.
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