Railway Stocks Crash Around 7% After Budget 2025 – Here’s Why Investors Are Disappointed

Shares of key railway companies took a sharp hit on February 1, 2025, after Finance Minister Nirmala Sitharaman concluded her Union Budget 2025-26 speech. Investors were left disappointed as the Budget did not announce any major reforms or increased capital expenditure for the railway sector, contrary to market expectations. Stocks of IRCTC, IRFC, IRCON, and others declined sharply, dropping as much as 7% in intraday trade.

The biggest disappointment for investors was the lack of additional capital expenditure for the railways. While the overall capex for FY26 was increased by nearly 10% to ₹11.2 lakh crore, the railway sector’s allocation remained stagnant at ₹2.55 lakh crore, the same as the previous year. Market participants had anticipated a rise in railways’ budgetary outlay in Union Budget 2025-26, but the government maintained last year’s levels, leading to a sharp sell-off in railway stocks.

Adding to the concerns, the specific capex spending for the railway sector also remained unchanged at ₹2.52 lakh crore for FY26, reinforcing the sentiment that the sector did not receive the push investors were hoping for.

Major Railway Stocks See Sharp Declines

At market close, key railway stocks ended on a negative note.

• IRCTC fell 3.36% to end at ₹794.70 per share.
• IRFC saw a sharper decline of 6.44%, dropping to ₹141.22 per share.
• IRCON also plunged over 9.28% to end at ₹200.88 apiece.
• RVNL recorded heavy losses, tumbling over 8.98% to ₹433.55 per share.
• Titagarh Rail Systems, which had earlier gained in morning trade, reversed course and fell over 6.18% to ₹956.
• RailTel Corporation of India dipped 6.87% to ₹378.65 per share.
• Texmaco Rail and Engineering also suffered a steep fall, plunging 9.46% to ₹177.99 per share.

This is not the first time railway stocks have witnessed a steep fall after the Budget announcement. In the interim Budget for 2024-25, the railway sector’s capex saw only a marginal 5% increase, which had also triggered a sell-off in railway-related stocks at the time. Investors had hoped for a stronger push this year, but the unchanged allocation led to another wave of disappointment.

In Conclusion

The sharp decline in railway stocks share price post-Budget indicates that investors were expecting a much stronger push for the sector. With no new capex boost and allocations remaining static, railway stocks took a hit amid profit booking and lowered growth expectations. Moving forward, investor focus will likely shift to government policies outside the Budget, upcoming projects, and private sector involvement in rail infrastructure to gauge long-term opportunities in railway stocks.