Railway stocks rally as Ashwini Vaishnaw retains railway ministry; IRCTC, IRCON, RailTel surge up to 6%

Shares of Railway-related stocks such as IRCON, IRCTC, RailTel, Rail Vikas Nigam (RVNL), IRFC (Indian Railway Finance Corp), RITES, Texmaco Rail, Titagarh Railsystems, and others witnessed strong buying today after Ashwini Vaishnaw retains railway ministry in Modi 3.0. The Bharatiya Janata Party (BJP) has retained the key infrastructure ministries such as railways, highways, and ports and shipping in the new coalition NDA government, signaling continuity in policies.

“The BJP keeping the key portfolios signals continuity in policies. This is a positive from the market perspective,” says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Boosted by the development, all railway-related stocks were trading higher today, with sectoral leader IRCTC, the catering and ticketing arm of the Indian Railways, surging 6%. This was followed by IRCON International shares, which jumped 5%, while RailTel, RVNL, and Indian Railway Finance Corp shares rose in the range of 2-5%.

Among others, Texmaco Rail, RITES, BEML shares also witnessed surge in buying, gaining up to 5%.

In comparison, the BSE Sensex was trading 160 points higher at 76,651, and the NSE Nifty was up 63 points at 23,322 levels.

PM Narendra Modi on Sunday evening took the oath of office as the head of a 72-member Council of Ministers for a third successive term, while portfolios were assigned to ministers on Monday evening. It is notable that the NDA government has retained the key ministries, with Rajnath Singh continuing as defence minister, Amit Shah as home minister, Nitin Gadkari as the minister of road transport and highways, S Jaishankar as the external affairs minister, and Ashwini Vaishnaw as railway minister. Nirmala Sitharaman has retained the ministry of finance and corporate affairs while newly elected Lok Sabha MP Piyush Goyal retained the ministry of commerce and industry.

Railway-related stocks such as IRFC, IRCTC, RVNL, and others witnessed strong rally over the past year amid a positive outlook for the sector, coupled with the government's impetus on infrastructure development in the railways. In the Union Budget 2024, the government of India increased capital expenditure by 11.11% to ₹11.11 lakh crore, providing tailwinds to the infrastructure sector and the companies engaged in this sector will definitely benefit. The proposed capital outlay of ₹2.55 lakh crore and ₹2.78 lakh crore has been provided for railways and road & highways, respectively, which is the highest ever outlay. Besides, the government has announced the implementation of 3 major railway corridor programmes under PM Gati Sakti to improve logistics efficiency and reduce costs. It is also promoting urban transformation via Metro rail and NaMo Bharat.

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