IRFC, RVNL to IRCON: Experts recommend railway stocks to buy ahead of Budget 2026

Union Budget 2026: Union Finance Minister Nirmala Sitharaman is set to present her ninth consecutive budget speech on Sunday, 1 February 2026, as the nation eyes the biggest financial event at the beginning of the year.

In the Union Budget 2025-26, the centre allocated ₹2.65 trillion to the Ministry of Railways, marking the highest-ever capital allocation for the infrastructure development, station and train modernisation, and towards boosting connectivity, safety and passenger comfort.

Experts anticipate that the government's key focus in the upcoming Budget will be towards continuing the expansion and modernisation of the facilities rather than increasing the budgetary capex in an aggressive way.

What is focus for Railways in Budget 2026?

Pranay Aggarwal, the Director and CEO of Stoxkart, said that after the recent correction in the Railway stocks, the investors are now focusing on the optimism driven by the upcoming Union Budget 2026.

“In the Budget for 2026–27, a modest increase in capital expenditure for Indian Railways is expected, with allocations likely to rise to around ₹2.75 trillion from ₹2.52 trillion, implying a near-10% increase,” said Aggarwal.

Aggarwal expects the government to support prioritising modern trains, safety initiatives like Kavach, signalling and technology-led upgrades on the backdrop of Indian Railways using more than 80% of the current fiscal year's capex allocation as of December 2025.

Initiatives like track expansion, electrification, signalling and safety will account for the larger share of railway capex compared to rolling stock, said the industry expert.

“The anticipated 10–12% rise in railway capex to nearly ₹2.8 trillion in FY27 could translate into healthy order inflows across EPC, safety systems, track works, electrification, station redevelopment and rolling stock. This, along with improving railway finances and strong execution, should support revenue visibility for EPC and infrastructure players, while also aiding rolling stock manufacturers,” said Pranay Aggarwal.

The market expert said that after the Union Budget announcement on 1 February 2026, public sector railway stocks are likely to become appealing to investors seeking stability and policy-linked earnings visibility, while private sector companies could offer higher growth potential over scalability and technology adoption.

Should you buy railway stocks ahead of Budget 2026?

Seema Srivastava, Senior Research Analyst at SMC Global Securities, explained that investing in railway stocks ahead of Budget 2026 can be a strategically sensible decision for long-term investors looking to bet on infrastructure growth, government capex, and structural reforms in the transport sector.

However, the expert also highlighted that the railway stocks can be volatile and many sector names have seen significant price corrections from their peaks as valuations adjusted after earlier rallies and due to mixed earnings momentum in individual companies.

Srivastava recommended that investors conduct valuation and risk assessments and diversify to avoid overconcentration, as the Budget optimism often acts as a near-term catalyst, while on a longer term returns depend on fundamentals like orderbook growth, execution capability, margin trends, balance-sheet strength, etc.

Stocks to buy

1. Indian Railway Finance Corporation (IRFC): CMP at ₹116.40.

Srivastava suggests IRFC has strong government backing and stable dividend payments.

2. Rail Vikas Nigam Ltd (RVNL): CMP at ₹321.

RVNL is a core infrastructure execution company with robust orderbook growth.

3. Indian Railway Catering and Tourism Corporation (IRCTC): CMP at ₹613.90.

IRCTC has a consumer-oriented play on rail travel and services.

4. Titagarh Rail Systems Ltd (TITAGARH): CMP at ₹780.

Titagarh Railway Systems makes wagons and coaches for the Indian Railways. Expert recommends to buy for a long-term investment.

5. IRCON International Ltd (IRCON): CMP at ₹156.20.

IRCON International carries out Engineering, Procurement, and Construction work for Indian Railway entities. Expert recommends to buy stock for long term.

6. Texmaco Rail & Engineering Ltd (TEXRAIL): CMP at ₹120.25.

Texmaco Rail is an ancillary stock which makes components for Indian Railways. Expert suggests to invest funds for long-term in the stock.

7. RailTel Corporation of India Ltd (RAILTEL): CMP at ₹331.50.

RailTel Corp is a Navratna PSU that operates telecom and ICT networks for Indian Railways. The expert recommended to buy this stock for long-term.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.