IRFC, RVNL, Ircon decline: Why Railway Stocks dropped - Is it profit booking or downturn?
After rallying last week, Railway stocks like IRFC, RVNL, Ircon, Jupiter Wagons and others declined on Monday. The Railways shares dropped due to profit booking.
New Delhi: After a sharp rise in the shares of the railway sector, there was a sudden break on Monday. After recording strong growth in the last five trading sessions, investors started withdrawing profits, which caused the shares of many major railway companies to slip by 3 to 4 percent. However, experts believe that this decline is not a sign of any negative change, but the result of normal profit booking after the recent boom. The recent increase in passenger fares and expectations from the upcoming budget are still keeping this sector in the news.
IRFC, RVNL stocks decline
On Monday, the shares of Indian Railway Finance Corporation (IRFC) fell by about 4 percent to Rs 128.30 on the NSE at the time of writing this article. Rail Vikas Nigam Ltd (RVNL) also saw a decline of about 3.4 percent and the stock slipped to Rs 374.70 apiece.
Apart from this, the shares of Ircon International fell by about 2.1 percent to 175.10 rupees. Jupiter Wagons also recorded a decline of about 2.9 percent, while Indian Railway Catering and Tourism Corporation (IRCTC) weakened by about 0.6 percent to close at 701.25 rupees.
Why Railway shares declined
This decline comes at a time when railway stocks have shown tremendous rally in the last five sessions. RVNL's shares had surged from around Rs 306 to around Rs 387, which means an increase of more than 26 percent. IRFC also traveled from Rs 110.81 to Rs 133.60 during this time, which is a return of more than 20 percent.
Ircon International also saw an increase of about 19 percent. Apart from this, good buying was also seen in RailTel Corporation of India and IRCTC. In such a situation, investors are looking at the current decline as a profit recovery and not as a sign of losing confidence in the sector.
Railways Sector got support from fare hike
The main reason for the recent rise in railway shares has been the revision in the fare of passenger trains. This is the second rent hike in 2025. The government says that its purpose is to strengthen the financial position of railways without putting too much burden on the pockets of passengers.
According to the Ministry of Railways, this hike applies to normal and mail-express trains, whereas there is no change in the fare of suburban services and season tickets. There is no increase in the ordinary second class to 215 kilometers, whereas it has been increased from 5 to 20 rupees for long distances. In mail and express trains, there has been an increase of 2 paise per kilometer in both non-AC and AC categories.
The Ministry of Railways has stated that with the last fare hike in July 2025, an additional income of about 700 million rupees has been made so far. This has strengthened the strategy of increasing the income of railways.
With this, investors' eyes are now on the Union Budget 2026-27. According to reports, a record Rs 1.3 lakh crore may be allocated for rail safety in the next financial year, which will be a large part of the total capital expenditure. This is the reason that even though railway stocks may fluctuate at the moment, this sector may remain in the eyes of investors in the coming days.
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