Union Budget 2026: Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget on Sunday, February 1, 2026, marking the first major economic event of the year.
In the Union Budget
2025-26, the Centre allocated Rs 2.65 trillion to the Ministry of Railways — the highest-ever capital outlay — to fund infrastructure expansion, station and train modernisation, and to improve connectivity, safety and passenger comfort.
Market experts expect the government’s focus in Budget 2026 to remain on consolidation, execution and modernisation rather than on an aggressive jump in railway capex.
What is the focus for Railways in Budget 2026?
Pranay Aggarwal, Director and CEO of Stoxkart, said that after the recent correction in railway stocks, investors are turning optimistic ahead of the Union Budget.
“For FY27, a modest rise in railway capital expenditure is expected, with allocations likely to increase to around Rs 2.75 trillion from Rs 2.52 trillion, implying a near 10 percent growth,” Aggarwal said.
He expects policy emphasis to remain on modern trains, safety systems such as Kavach, signalling and technology-driven upgrades, especially as Indian Railways has already utilised more than 80 percent of its FY26 capex allocation by December 2025.
According to Aggarwal, track expansion, electrification, signalling and safety projects will command a larger share of railway capex than rolling stock.
“The anticipated 10–12 percent rise in railway capex to nearly Rs 2.8 trillion in FY27 could translate into healthy order inflows across EPC, safety systems, track works, electrification, station redevelopment and rolling stock. This should support revenue visibility for EPC and infrastructure players and also benefit rolling stock manufacturers,” he added.
Aggarwal said that post-Budget, PSU railway stocks may appeal to investors seeking stability and policy-linked earnings visibility, while private sector companies could offer higher growth potential through scalability and technology adoption.
Should you buy railway stocks ahead of Budget 2026?
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said investing in railway stocks ahead of Budget 2026 could be a sensible strategy for long-term investors looking to benefit from infrastructure growth, government capex and structural reforms.
However, she cautioned that railway stocks remain volatile and many have corrected sharply from their peaks due to valuation adjustments and mixed earnings performance.
She advised investors to assess valuations and risks carefully and diversify portfolios, noting that Budget optimism often acts as a short-term trigger, while long-term returns depend on fundamentals such as order book strength, execution capability, margin trends and balance-sheet quality.
Railway stocks to buy
- Indian Railway Finance Corporation (IRFC) — CMP: Rs 116.40
Strong government backing and stable dividend outlook. - Rail Vikas Nigam Ltd (RVNL) — CMP: Rs 321
Core railway infrastructure execution company with a strong order book. - Indian Railway Catering and Tourism Corporation (IRCTC) — CMP: Rs 613.90
Consumer-focused rail travel and services play. - Titagarh Rail Systems Ltd — CMP: Rs 780
Wagon and coach manufacturer; recommended for long-term investment. - IRCON International Ltd — CMP: Rs 156.20
EPC player for Indian Railways; suitable for long-term investors. - Texmaco Rail & Engineering Ltd — CMP: Rs 120.25
Ancillary manufacturer of railway components; long-term investment pick. - RailTel Corporation of India Ltd — CMP: Rs 331.50
Navratna PSU providing telecom and ICT services to Indian Railways; recommended for long-term holding.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
