Indian Railways is one of the world's largest rail networks and plays a vital role in India's economy by transporting millions of passengers and large volumes of freight every day.
The government has significantly increased investments in railway infrastructure through higher capital expenditure, focusing on track expansion, electrification, station redevelopment, dedicated freight corridors, and modern trains such as Vande Bharat.
These investments aim to improve efficiency, safety and connectivity while supporting economic growth. The long-term spending cycle has also created opportunities for railway-related companies involved in engineering, signalling, rolling stock, construction, and railway equipment manufacturing.
Some Domestic Institutional Investors (DIIs) have increased their stake in railway-related companies.
Here are three such railway stocks in which DIIs have increased their stakes.
Indian Railway Finance Corp. Ltd (IRFC)
IRFC is the dedicated financing arm of Indian Railways and a Government of India-owned public sector enterprise.
Established in 1986, the company primarily raises funds from domestic and international markets to finance the acquisition of rolling stock, railway infrastructure projects and other capital expenditure requirements of Indian Railways.
DIIs hiked their stake in the company from 2.9% in the March 2026 quarter to 4% in the June 2026 quarter.
On the financial front, FY26 was a good year for the company. IRCTC achieved record revenues, with net profits crossing the ₹7,000-crore mark for the first time.
In FY26, net assets under management grew to ₹4.85 trillion at the end of the year.
Going forward, management has said that, in terms of top line, bottom line, net worth, net interest margin, and EPS, they have set a target for FY27 and beyond: the company should grow all of them by double digits.
Titagarh Rail Systems Ltd
Titagarh Rail Systems is one of India's leading railway equipment manufacturers.
The company designs and manufactures a wide range of rolling stock for both passenger and freight rail transportation. It has evolved from a wagon manufacturer into a comprehensive rail mobility company with strong exposure to high-growth railway segments.
DIIs have hiked their stake in the company from 12.5% in the March 2026 quarter to 15.4% in the June 2026 quarter.
On the financial front, Titagarh Rail Systems reported revenues of ₹875.4 crore in Q4 FY26, down from ₹1,005.6 crore year-on-year. The company reported a net profit of ₹56.6 crore against losses on-year.
Moving forward, the company has fully exited its investment in Firema. According to management, Firema has been a highly strategic investment for the company because, following the acquisition, Titagarh Rail was able to enter the passenger rail systems business.
However, that part of the strategy had already been fulfilled, and Firema remained a drain on the consolidated balance sheet, P&L, and cash flow. With the sale of Firema, Titagarh has now put a stop to that.
Going ahead, Titagarh has a healthy order book. The overall order book, including its share of the joint ventures and subsidiaries, is at about ₹27,540 crore.
Rail Vikas Nigam Ltd
RVNL is a Navratna public sector enterprise under the ministry of railways. The company undertakes projects such as new railway lines, track doubling, electrification, bridges, tunnels, station redevelopment, and metro rail systems.
RVNL primarily executes projects for Indian Railways and other government agencies, earning revenue through engineering, procurement, and construction (EPC) contracts.
DIIs hiked their stake in the company from 6.4% in the March 2026 quarter to 6.6% in the June 2026 quarter.
Moving ahead, the company has a sizeable order book. As of 31 March 2026, the company's total order book stood at an impressive ₹99,262 crore.
The order book is primarily driven by railways with ₹57,000 crore followed by signalling at ₹14,900 crore; port, roads, highways at ₹10,400 crore; and metros at ₹9,900 crore. The company also has works of power and transmission of about ₹ ₹4,000 crore, and a hydro and irrigation project at ₹2,000 crore.
According to management, RVNL continues to demonstrate disciplined execution and stable operational performance, supported by a strong and diversified order book.
They say the company is focused on efficient project delivery, margin discipline, and conversion of healthy L1 and LOA in the pipeline. RVNL is also looking at opportunities in diversified infrastructure and emerging business areas.
Investors should evaluate the company's fundamentals, corporate governance, and stock valuation as key factors in due diligence before making investment decisions.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com