Shares of railway-linked companies, including Indian Railway Finance Corporation (IRFC) fell on Monday after a strong rise seen over the last few trading sessions.

Shares of Indian Railway Finance Corporation (IRFC) fell as much as 4.64% during the day to Rs 127.44 on the BSE. Rail Vikas Nigam Ltd (RVNL) declined up to 3.84% to Rs 373.05.

The fall in share price came as investors chose to book profits following a sharp rally, even though interest in railway stocks remains high due to recent fare changes and expectations from the upcoming Union Budget.

Ircon International slipped around 2.1% to Rs 175.10. Indian Railway Catering and Tourism Corporation (IRCTC) eased nearly 0.5% to Rs 701.60. Jupiter Wagons dropped up to 3.22% to Rs 336.35.

WHY ARE RAILWAY STOCKS FALLING TODAY?

The fall of these railway stocks came after a strong rally over the previous five sessions. During this period, railway stocks moved up sharply as investors positioned themselves ahead of higher passenger fares and expected more spending on railways in the next budget.

In the last five trading sessions, RVNL shares climbed from around Rs 306 to about Rs 387.25, gaining more than 26.50%. IRFC rose from Rs 110.81 to Rs 133.60, a rise of over 20%.

Ircon International moved up from nearly Rs 150 to around Rs 178.25, gaining close to 19%. RailTel Corporation of India and IRCTC also saw strong buying interest during this phase.

The recent fall looks like a short-term profit booking rather than a change in view on the railway sector. After such a quick rise, some investors usually prefer to take in gains, which leads to temporary pressure on prices.

GOVERNMENT REVISES RAILWAY FARES FOR 2ND TIME

Railway stocks had gained momentum after the government’s revised passenger train fares came into effect last week. This was the second fare hike in 2025 and was aimed at improving the financial position of Indian Railways while keeping travel affordable for passengers.

The Railway ministry said the fare change applies to ordinary and mail or express trains. Suburban services and season tickets have not been changed.

For second class ordinary travel, there is no increase for journeys up to 215 km. For distances between 216 km and 750 km, fares have gone up by Rs 5. For longer distances, the increase ranges from Rs 10 to Rs 20 depending on the length of the journey.

For sleeper class and first class ordinary travel, fares have been revised at 1 paise per kilometre for non-suburban routes. Mail and express trains will see a rise of 2 paise per kilometre across non-AC and AC classes.

According to the ministry, a passenger travelling 500 km in a non-AC mail or express train will pay only about Rs 10 extra.

The revised fares apply to express trains such as Rajdhani, Shatabdi, Duronto, Vande Bharat, Tejas, Humsafar and Amrit Bharat. Tickets booked on or after December 26 reflect the new fares, while bookings made earlier are not affected.

The BUDGET FACTOR

Railway stocks are also being closely watched due to expectations from the Union Budget for 2026–27.

Reports suggest that the budget may set aside a record Rs 1.3 trillion for rail safety, which could form nearly half of Indian Railways’ total capital spending. This comes at a time when safety and faster rollout of protection systems are in focus.

The Railway ministry has said that the previous fare hike in July 2025 has already generated around Rs 700 crore in revenue. This has highlighted the role of fare revisions in supporting railway finances.

While Monday’s fall shows that short-term ups and downs are likely after a strong rally, railway stocks are expected to remain in focus as investors track budget announcements and further policy steps linked to the sector.