Indian Railways to Boost Capex: Rail Stocks Set to Gain
Key Ideas
- Indian Railways plans to increase capex by 15% in FY27, focusing on network infrastructure, rolling stock, safety, and station redevelopment.
- Companies like IRFC, RVNL, and Texmaco Rail & Engineering Ltd are expected to benefit from the surge in railway sector investments.
- IRFC's strong portfolio and partnership with IIFCL position it well for sustained growth in funding railway projects.
- Texmaco expands production capabilities through acquisitions, poised to capitalize on Indian Railways' increasing demand for railway equipment.
Indian Railways is set to raise its capital expenditure (capex) by about 15% in FY27, exceeding Rs.3 lakh crore, aiming to enhance network infrastructure, rolling stock, safety, and station redevelopment. Notably, investments will target new projects like bullet trains, hydrogen-powered trains, and the Hyperloop. Locomotive, wagon, and coach production are expected to rise significantly, with plans to escalate output. Companies like IRFC, RVNL, and Texmaco Rail & Engineering Ltd are poised to benefit. Railway stocks such as IRFC have shown substantial growth post-IPO and maintain a strong base for future performance. RVNL is focusing on market-driven bidding to bolster revenue targets and operational efficiency. Texmaco's acquisition strategies, like Jindal Rail and Infra, have strengthened its position in the market, enabling it to meet the increasing demand for railway equipment fueled by Indian Railways' expenditure plans.