The stock market is trading at a decline, but railway shares are seeing good growth. Shares of railway-related companies including Rail Vikas Nigam (RVNL), RailTail Corporation (RailTail), Indian Railway Finance Corporation (IRFC), Texmaco Rail and Engineering and Indian Railway Catering and Tourism Corporation (ICTC) saw a rise of up to 13 percent in Friday’s trade. This rise has come after being sluggish for several days.
Shares of RVNL rose by 13.21 percent from the previous closing price of Rs 345.70 on BSE and reached Rs 391.40. Despite this gain throughout the day, the stock remains down 9 percent so far in 2025. Shares of RailTel rose by 8.11 percent to reach Rs 385.45, whereas they had closed at Rs 356.55 on the previous day.
At the same time, shares of IRFC, the giant company which provides financial assistance to Railways, increased by 8.65 percent to reach Rs 131.95. Other main shares Texmaco Rail was trading 4.47 percent higher at Rs 140.10 and IRCTC was trading 3.79 percent higher at Rs 705.30. IRFC shares have increased by 9 percent and reached Rs 132.43.
Then why did railway stocks start running away?
The biggest reason behind this rally is the increase in railway fares. After the increase in July, this is the second time in a year that the fare has been increased. The government said that the Railways has increased its passenger fares with the aim of maintaining a balance between fares for passengers and sustainability of operations.
How much has the railway fare increased?
The government said that there has been no increase in fares for journeys up to 215 kilometers on general tickets in second class, which will not affect short distance and daily commuters. However, the fare for long distance journeys has been changed. The fare has been increased by Rs 5 for distance between 216 km to 750 km. For journeys beyond this, there has been an increase of Rs 10 for distance between 751 km to 1250 km, Rs 15 for distance between 1251 km to 1750 km and Rs 20 for distance between 1751 km to 2250 km.
The order said that for the safety of daily commuters, there has been no change in the fares of suburban services and season tickets, while the fares of mail/express trains have been revised by 2 paise per kilometer in all classes, which investors see as a step towards improving the financial condition of the national transport company.
Impact of expectations also in the budget
Apart from the fare revision, the market environment has become positive before the Union Budget 2026. Generally, before the budget, investor interest in shares of railway-related companies increases, mainly due to expectations of increase in capital expenditure.
(Note – Before investing in any share, please take the help of your financial advisor.)
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