India’s state-run and private railway-linked stocks like IRFC Ltd., RVNL Ltd., IRCON International Ltd., RailTel Ltd. and IRCTC Ltd. have seen a sharp sell-off of up to 6% after their budgetary allocation for financial year 2026.

Shares of IRFC are down over 5%, while those of RVNL and IRCON are trading with losses of over 6% each. Shares of RailTel are trading 3% lower despite multiple order wins earlier in the day worth ₹220 crore.

Budget documents show that the allocation to the railways sector has remained unchanged for the railways sector at ₹2.55 lakh crore for financial year 2026. The allocation for financial year 2025 was also at ₹2.55 lakh crore.

The government in the Union Budget is anticipated to lay major emphasis on key infrastructure segments such as roads, railways, airports and urban infra.

In case there is an increased announcement for capex for the railways, it would benefit the entire sector as a whole. Brokerage firm Equirus is anticipating a capex of ₹2.03 lakh crore, a year-on-year growth of 12% for the railways.

In case there happen to be announcements for more Vande Bharat trains, it will be positive for stocks like Rail Vikas Nigam, Jupiter Wagons, Titagarh, RITES and BEML. Shares of BEML too are trading with gains of nearly 8% on Friday.

There has been a lot of focus on the KAVACH train protection system after the recent train accidents. In case there is a KAVACH-specific announcement, it will be positive for stocks like HBL Power, Kernex Microsystems, KEC International, RailTel and Siemens.

In case the Finance Minister lays out a roadmap for higher rolling stock procurement for the Railways, it will benefit stocks like Titagarh and Texmaco.

Equirus expects the railways to account for 23% of the overall capex announcement that is likely to be made in the budget.