The Indian railway sector is one of the largest railway networks in the world, and has become a focus of government investment. The centre’s push for long-overdue network expansion and modernization has created new growth opportunities for the sector. 

In FY26, the Union Budget allocated Rs 2.62 lakh crore to Indian Railways – 22.7% of the total budget, and three times the Rs 0.93 lakh crore allocated in FY16. The goals were expanding freight capacity, modernising infrastructure, and improving safety.

Is this a new golden age for railway stocks? The increased capex, and the government focus on better railway infrastructure has accelerated growth in railway projects, creating a ripple effect on railway-related stocks, which have seen strong order inflows. 

The government’s investments in railway and metro projects have driven share price growth in key sectors. Wagon and coach manufacturers such as Titagarh Rail, Texmaco Rail, and Jupiter Wagons won orders for freight wagons, passenger coaches, and metro cars.

Infrastructure providers like IRCON International and RVNL capitalized on electrification and station upgrade orders, while financing companies like IRFC supported the sector by funding railway projects and infrastructure development.

Industry experts expect railways to remain a priority, as the government reduces logistics costs and increases freight share. Ashish Modani, Vice President at ICRA, said, “Roads and railways will be the government’s top priorities due to their critical role in lowering logistics costs. Over the years, the rail share in freight transportation has declined, and there’s a strong push to reverse this trend.”

Despite great returns over 5 years, railway stocks have faced a downturn in 2025, primarily due to weak government spending and negative sentiment in global markets. Concerns over high valuations and delays in order execution have added to the uncertainty. 

In this edition of Chart of the Week, we analyze railway stocks and their growing order books over the past five years.

Government spending fuels growth for wagon and coach makers

In FY26, the government allocated Rs 57,693 crore for 200 Vande Bharat sleeper trains, 100 Amrit Bharat trains, 50 Namo Bharat rapid rail trains, and 17,500 non-AC coaches. These initiatives are creating opportunities for companies in the wagon and coach manufacturing sector.

Titagarh Rail Systems, Jupiter Wagons, and Texmaco Rail & Engineering collectively control 70% of the Indian wagon manufacturing market. 

Titagarh Rail Systems, a commercial vehicle industry player specializing in railway wagons, coaches, and metro trains, holds a 30% market share in freight wagon production. Its share price is up 2,100% in the past five years, driven by an order book growing at a CAGR of 62.1%. The company more or less relies on one client, the government – it receives nearly 99% of its orders from the Ministry of Defence and the Railways.

Between FY19 and FY24, Titagarh’s revenue grew at a CAGR of 19.5%, reaching Rs 3,893 crore. Over the same period, it shifted from a Rs 28.5 crore loss to a profit of Rs 286 crore. 

Jupiter Wagons generates 80% of its revenue from railway wagons. Its share price has risen  600% in the past five years. As of FY25, the order book stands at Rs 6,320 crore, with 50% coming from government orders. 

In FY23, the company secured a large order of Rs 58,200 crore from the Ministry of Defence and Railways. Over the last five years, the company’s revenue grew at a CAGR of 76% to Rs 3,641 crore in FY24, and its net profit increased by 30% to Rs 333 crore during the same period. 

Texmaco operates in freight wagons, rail, and electrical businesses, with a 20% market share in India’s wagon industry. It generates 84% of its revenue from wagons. Over the last five years, its share price has jumped 540%, and the order book has grown at a CAGR of  25.3% to Rs 7,878 crore in FY24. 

The company derives 80% of its revenue from government projects. Revenue grew at a 13.5% CAGR to Rs 3,503 crore, while profit increased at an 8.4% CAGR to Rs 113 crore from FY19 to FY24.

BEML manufactures commercial vehicles for mining and construction, along with rail coaches, metro cars, and components for the railway sector. It generates 37.4% of its revenue from rail and metro projects. Its share price is up 440% in the last five years. Over this period, revenue grew at a CAGR of 3.2%, reaching Rs 4,096 crore, while net profit grew at a CAGR of 34.8% to Rs 281.8 crore from FY19 to FY24.

RVNL and IRCON ride Centre’s railway infra project wave

The government is expanding railway infrastructure to reduce logistics costs, streamline transportation, and support trade and economic development. In the FY26 budget, the government allocated Rs 32,235 crore for new railway lines.

RVNL, a Navratna PSU, specializes in railway infrastructure within the Construction & Engineering industry. RVNL’s shares have gained 1,790% over the last five years. The order book stood at Rs 97,000 crore at the end of the December quarter, 4.8 times its trailing 12-month revenue. The company derives 91.3% of its revenue from railway projects, with the rest from metro and national highway projects.

Its revenue increased from Rs 14,776.26 crore in FY20 to Rs 23,074 crore in FY24, while net profit doubled from Rs 753.32 crore to Rs 1,574 crore over the same period. Government-backed initiatives like railway electrification and the introduction of the Vande Bharat train have driven RVNL’s growth.

IRCON International operates in the construction and engineering industry, focusing on railways, highways, and bridges. Its shares have risen 250% over the past five years. As of Q3FY25, the company’s order book totals Rs 21,939 crore, with 78% of the revenue from railway projects and the rest from highways.

IRFC and RailTel drive railway growth through funding and digitisation

The government is modernizing Indian Railways through investments from financing institutions like IRFC. Indian Railway Finance Corporation (IRFC) is a Navratna PSU and a Non-Banking Financial Company. It serves as the financing arm of Indian Railways for large-scale expansion and upgrades. Since its listing in January 2021, IRFC’s share price has jumped 400% to Rs 124.

IRFC’s asset under management (AUM) has risen 6.5 times, from Rs 70,471 crore in FY20 to Rs 4,64,641 crore in FY24. The NBFC finances around 80% of Indian Railways’ needs. 

RailTel offers telecom and digital services to Indian Railways, focusing on projects like train communication systems, real-time monitoring, and station upgrades. Since its listing in 2021, the company's share price has increased by 145%, reaching Rs 292. Its order book grew from Rs 4,400 crore in FY21 to Rs 5,280 crore in FY25, with 28% linked to railway contracts.