Jupiter Wagons, Ircon, IRCTC, RVNL shares fall up to 8% as railway Budget misses expectations

The government allocated Rs 2.5 lakh crore for railway capex in FY26, the same as last year, disappointing those anticipating a double-digit increase. This led to a broad sell-off in railway stocks, with shares of Jupiter Wagons plunging as much as 8% on Monday to Rs 347.4 on the BSE, while Ircon International saw a 5.6% decline, dropping to Rs 189.75. Rail Vikas Nigam (RVNL) shares were down 6.5%, Texmaco dropped 4.3%, IRFC stock fell 4.6%, and Titagarh Rail witnessed a 7% decline on Monday.

The Budget also revealed a modest increase in the total government capex outlay, rising from Rs 11.11 lakh crore in the last fiscal year to Rs 11.2 lakh crore—far lower than anticipated, further dampening sentiment in infrastructure stocks.

Analysts noted that the Budget struck a balance between promoting consumption through personal income tax benefits and moderating capital expenditure, with fiscal prudence taking precedence over growth. This cautious approach left investors wary of the short-term growth prospects for the railway sector.

Despite a strong earnings report for the December 2024 quarter, where Jupiter Wagons posted an 18% rise in net profit to Rs 96.43 crore and a 14.95% jump in sales to Rs 1,029.83 crore, investor sentiment in the sector remained tepid. Jupiter Wagons’ board had also approved a Rs 3,000 crore Qualified Institutional Placement (QIP) to raise capital, but the overall weak sector outlook overshadowed the positive financial results.

Analysts suggest that infrastructure stocks, particularly in the railway sector, could face pressure in the short term due to the government’s restrained capex focus.”The government’s focus until now was on infrastructure and capex seems to be taking a hit due to political compulsions and freebie politics. With this modest increase the railways, defense, infrastructure and engineering is likely to take a hit. On the other hand, FMCG, auto, and consumer durables are likely to be in the limelight going forward,” Apurva Sheth, Head of Market Perspective & Research, SAMCO Securities said.Also read | Small and midcap stocks down 15% in 4 months, Nuvama shares 20 bottom-up ideas

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