Shares of railway-related stocks witnessed a strong rally on Friday, with index heavyweights IRCON International Ltd, Rail Vikas Nigam Ltd (RVNL), IRFC, IRCTC, and BEML surging up to 10%, in sync with the broader market. The equity benchmarks Sensex and Nifty rose by 1% as investors rushed to buy ahead of the Budget announcement. Railway-related stocks saw value buying, as many had undergone sharp corrections in recent months, falling up to 40% from their 52-week highs.

State-owned IRCON International Ltd was the top gainer among its peers, with its share price rising as much as 9.4% to hit an intraday high of ₹221.65 on the BSE. At the current level, the midcap stock is down 37% from its 52-week high of ₹351.65 on July 15, 2024. The stock gained momentum after its joint venture secured an EPC contract worth ₹631.2 crore. The Amril-IRCON joint venture will construct rigid pavement and lined drains for selected roads under the Imphal East Division (ED–2), covering a total length of 122.209 km.

"It is to inform that Ircon International Limited (Ircon) has been awarded an EPC contract in JV (Amril -Ircon) through Letter of Acceptance by Office of the Project Director, Externally Aided Projects (EAP), Public Works Department (PWD) Manipur," it said in a BSE filing.

Meanwhile, shares of IRFC, RVNL, RailTel, BEML, and IRCTC gained between 2% and 8% in the run-up to the Budget. Private railway-linked stocks such as Titagarh Rail and Jupiter Wagons surged up to 10% amid market euphoria ahead of Budget 2025.

According to reports, the Ministry of Railways is likely to receive the highest capital expenditure allocation in the upcoming Budget, surpassing the Ministry of Highways, which has traditionally been the top recipient. Sources indicate that the Railways may receive the largest share of the capex budget due to better utilisation of FY25 allocations and an extensive project pipeline, which includes corridor development projects and railway station modernisation initiatives.

Government data shows that as of November, the Ministry of Railways had spent ₹1,68,253 crore, or 67% of its ₹2,52,000 crore allocation for Budget 2024–25. In contrast, the Ministry of Road Transport and Highways had utilised only ₹1,46,827 crore, or 54% of its ₹2,72,000 crore capex allocation for the fiscal year. In Budget 2026, the Railway Ministry is expected to receive central capital expenditure support ranging from ₹2.9 lakh crore to ₹3 lakh crore, while the Highway Ministry may have to rely more on the Build-Operate-Transfer (BOT-Toll) model for road development.

The Ministry of Highways has lost momentum in highway construction in FY25 due to several factors, including land acquisition delays and the Union Cabinet's pending approval of the revised cost for the Bharatmala project.

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