Railway stocks are in focus amid expectations of a double-digit jump in the sector’s budgetary allocation. The anticipation comes after three years of muted growth, and with railways already utilising more than 80 per cent of this year’s capital outlay.
IRFC, RVNL, IRCON, IRCTC, Titagarh Rail Systems and Jupiter Wagons are all in focus as analysts peg FY27 allocation growth at 5 to 10 per cent. Any number above this will be treated as a positive surprise that could re-rate the pack.
Brokerages expect the spotlight to shift toward capacity expansion, rolling stock additions and safety upgrades. Some estimates see gross budgetary support at Rs 2.65 lakh crore, while the most bullish forecasts touch Rs 2.8 lakh crore. Safety systems like Kavach, station upgrades, decongestion through track doubling and the push on the bullet train corridor are expected to dominate.
Bajaj Broking expects a sharper focus on station modernisation and faster project execution. MOFSL sees an 8 to 10 per cent rise in capex. Axis Securities is more upbeat at 15 per cent.
With electrification near completion, capital is now likely to be channelled toward new lines, gauge conversions, Dedicated Freight Corridor expansion and port-linked economic corridors. The broader policy goal remains lowering logistics costs, which continue to sit above the 6 to 7 per cent benchmark in advanced economies.
Higher allocations would lift the entire value chain from consultancies and EPC players to equipment suppliers. Beneficiaries of safety spending include Kavach providers such as HBL Engineering, Kernex Microsystems, Siemens and CG Power through GG Tronics. The railways ministry is already working on an 18,000 km tender for Kavach 4.0.
Any push on train modernisation would boost coach manufacturers, including BEML, BHEL, Siemens and Titagarh Rail Systems.
Choice International says allocations near Rs 2.8 lakh crore would signal a strong commitment to infrastructure.
