RVNL, IRFC and other railway-linked stocks surge up to 10% as new railway fares kick in

Shares of rail-related companies including Rail Vikas Nigam Ltd (RVNL), Indian Railway Finance Corporation (IRFC), IRCTC, Ircon International, and Jupiter Wagons surged up to 10% on Friday, December 26, after the government’s revised passenger train fares came into effect. The move marks the second fare hike in 2025, aimed at balancing affordability for passengers with the sustainability of railway operations.

RVNL share price led the rally, climbing as much as 9.7% to Rs 379.20 on the BSE, while IRFC share price gained 6.7% to Rs 129.60. Jupiter Wagons share price rose 3.6% to Rs 352.65, and Indian Railway Catering and Tourism Corporation (IRCTC) shares were up 1.9% at Rs 692.80. Investors have been positioning ahead of the fare hike and in anticipation of budget allocations for the sector in the upcoming Union Budget 2026-27.

Fare hike details

The Railway Ministry said the fare revision affects ordinary and mail/express trains, while suburban services and season tickets remain unchanged. “Under the revised fare structure, there is no change in fares for suburban services and season tickets, including both suburban and non-suburban routes. For ordinary non-AC (non-suburban) services, fares have been rationalised in a graded manner across second class ordinary, sleeper class ordinary, and first class ordinary,” the ministry said.For second class ordinary travel, journeys up to 215 km will see no increase, while fares for 216–750 km rise by Rs 5. Longer journeys see incremental hikes: Rs 10 for 751–1250 km, Rs 15 for 1251–1750 km, and Rs 20 for 1751–2250 km. For sleeper and first class ordinary, fares have been revised at 1 paise per kilometre for non-suburban journeys. Mail/express trains will see a 2 paise per kilometre increase across non-AC and AC classes. “As an illustration, for a 500 km journey in non-AC mail/express coaches, passengers will pay only about Rs 10 extra,” the ministry said.

Wider impact

The fare revision affects major trains including Tejas Rajdhani, Rajdhani, Shatabdi, Duronto, Vande Bharat, Humsafar, Amrit Bharat, Tejas, Mahamana, Gatimaan, Antyodaya, Garib Rath, Jan Shatabdi, Yuva Express, and Namo Bharat Rapid Rail. Tickets booked on or after December 26 will reflect the new fares; bookings prior to this date remain unaffected. Fare charts at stations have been updated accordingly.The ministry noted that the previous fare hike in July 2025 generated Rs 700 crore in revenue to date, highlighting the financial impact of such measures.

Budget expectations

Railway stocks have also been buoyed by expectations around the Union Budget 2026-27. According to reports, the FY27 budget may allocate a record Rs 1.3 trillion for rail safety, nearly half of Indian Railways’ capital expenditure, amid ongoing concerns over accidents and slow implementation of protection systems.

With the new fares now in effect and budget allocations looming, rail stocks are likely to remain in investor focus as 2026 begins.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)