Railways are difficult to replace in a country like India. They move people across cities, towns and villages. They also carry coal, cement, foodgrains, steel, containers and several other goods. For many passengers and businesses, railways remain one of the most affordable and dependable modes of transport.
The sector is also going through a long investment cycle. The government has been spending on new tracks, station upgrades, electrification, freight corridors, safety systems and rolling stock. This has created opportunities for companies that supply products, services, finance and infrastructure support to the railway ecosystem.
In this article, we look at three railway stocks that have reported strong sales growth in recent years. The idea is not to pick the largest railway companies. It is to identify companies where revenue has grown faster than peers.
For this article, we considered companies with direct and meaningful exposure to Indian Railways. These include railway finance, railway telecom, wagon and rolling stock manufacturing, rail infrastructure and related service companies. The ranking is based on three-year sales CAGR.
#1 Railtel Corporation of India: Scaling Telecom and Data Infrastructure
RailTel was incorporated in 2000, with the objective of creating nationwide broadband and VPN services, telecom, and multimedia network, to modernize the train control operation and safety system of Indian Railways.
It is a NavratnaPSU of the Government of India. At present, RailTel’s network passes through around 6,000 stations across the country, covering all major commercial centers.
Financial Growth and Order Book Backlog
RailTel Corporation of India has emerged as one of the faster-growing railway-linked stocks by sales growth. The company has delivered a three-year sales compounded annual growth rate (CAGR) of 30%. Its profit CAGR stood at 24%. Its stock price CAGR was 39%. Its three-year return on equity (RoE) was around 16%. This gives the company a mix of revenue growth, profitability and market returns.
RailTel: Growth Across Revenue, Profits and Order Book
| Metric | Performance |
| 3-Year Revenue CAGR | 30% |
| 3-Year Profit CAGR | 24% |
| 3-Year Share Price CAGR | 39% |
| 3-Year Average RoE | ~16% |
| Order Book (Mar 2025) | ₹4,602 Cr |
| Order Book (Apr 2026) | ₹6,346 Cr |
| Order Book Growth | +38% |
| FY27 Order Book Target | ~₹8,500 Cr |
It should be noted that the company’s orders grew faster than its revenues. It order book grew around 38% in a year. At the same time it is also building newer businesses like data centres and Information and Communication Technology (ICT).For Q4 FY26, RailTel reported revenue from operations of Rs 489.4 crore. This was up 8% year-on-year (YoY). Net profit rose to Rs 113.4 crore up 46% YoY. For FY26, revenue from operations stood at Rs 1,861.2 crore, compared with Rs 1,788.9 crore in FY25. Profit after tax stood at Rs 246 crore, up 17%.
The quarter was driven by the project business and the telecom segment. The project segment reported Q4 revenue of Rs 382.3 crore. The telecom segment also grew during the quarter. Management said data and ICT income is part of the telecom segment. It also said the data centre business is now becoming a key growth area for the company.
RailTel’s order book stood at Rs 6,346 crore as of April 30, 2026. This was higher than Rs 4,602 crore as of March 31, 2025. The company said it expects growth in the coming quarters. It also indicated that it may close FY27 with an order book of around Rs 8,500 crore if the current trend continues.
Data Center Core Diversification Strategy
The management said data centres, telecom network capacity and project execution will remain key areas of focus. The company has already deployed a large data centre in Manesar. It is also working on edge data centres in Mumbai and other locations. The company is exploring co-location and hybrid models for future data centre expansion.
RailTel is trading at an EV/EBITDA ratio of 13.7 times. This is below its five-year average EV/EBITDA of 15.4 times. However, it is still higher than the industry median of 8.5 times. This suggests that the stock is cheaper than its own historical valuation, but not cheap compared with the broader industry. The company’s return ratios remain healthy, with return on capital employed (RoCE) at 22.8% and RoE at 17.1%. This supports the premium valuation to some extent.
RailTel’s growth profile fits the theme of railway-linked companies moving beyond traditional rail services. Its railway roots remain important. But its next phase also depends on execution in telecom, ICT and data centres. The company has healthy growth numbers. The challenge will be to convert its order book into revenue while protecting margins.
In the past year, the share price of Railtel Corporation of India is down 22.1%.
Railtel Corporation of India 1-Year Share Price Chart
#2 Texmaco Rail and Engineering: Structural Diversification Beyond the Wagon Cycle
Texmaco Rail & Engineering is an engineering infrastructure company and part of the Adventz Group. It is involved in the business of manufacturing Rolling stock, hydro-mechanical equipment, steel castings & construction of Rail EPC, bridges, and other steel structures.
Texmaco Rail and Engineering has emerged as one of the railway stocks with strong three-year growth. Its sales CAGR stood at 25%. Profit CAGR was sharper at 97%. Stock price CAGR was more moderate at 21%. Its three-year RoE stood at around 8%. This shows that profit growth has been strong, but return ratios are still improving.
Texmaco Rail: Growth, Returns & Valuation Snapshot
| Metric | Performance |
| 3-Year Revenue CAGR | 25% |
| 3-Year Profit CAGR | 97% |
| 3-Year Share Price CAGR | 21% |
| 3-Year Average RoE | ~8% |
| FY26 Freight Wagon Deliveries | 8,372 Units |
| Countries Served | 16 |
| EV/EBITDA (Current) | 11.0x |
| 5-Year Average EV/EBITDA | 13.4x |
| Industry Median EV/EBITDA | 16.9x |
| FY26 RoCE | 11.4% |
| FY26 RoE | 7.6% |
The sharp difference between the profit growth and growth of return ratios draws attention. The profits have multiplied quite quickly. But return ratios are still catching up. This shows that the market is focusing more on the its future potential than its present returns.
For Q4 FY26, Texmaco reported revenue from operations of Rs 1,167 crore. This was down 13.3% YoY. The decline came mainly due to challenging market conditions. Still, profitability improved. Profit after tax stood at Rs 58 crore, up 46% YoY.
For FY26, revenue from operations stood at Rs 4,377 crore. This was a 14% decline over the previous year. Profit after tax came in at Rs 194 crore, down from Rs 249 crore reported in previous year. The company said performance was affected by supply-chain issues, especially wheel-set availability, and weaker performance in its rail and green energy division.
Core Execution and Supply Chain Disruption
The company delivered 2,196 freight cars in Q4 FY26. For the full year, freight car deliveries stood at 8,372 units. The foundry division recorded 8,964 metric tonnes in Q4 and 34,000 metric tonnes for the full year. Texmaco said production and exports were affected by global supply-chain disruptions, shipping issues and US tariff-related pressures.
The Texmaco 2.0 Export Landscape
The core theme for Texmaco is now wider than wagon manufacturing. Under its Texmaco 2.0 plan, the company wants to strengthen its core rail business and reduce dependence on the wagon cycle. It is also looking at railway adjacencies, signaling, Kavach, propulsion, metro and urban mobility. The company has also chosen defence and digital services as new growth areas.
The company’s export story is also gaining scale. Management said Texmaco has supplied products to 16 countries. It also discussed a South African order involving 2,200 wagons, 30 diesel locomotives and a 15-year maintenance partnership. The order is expected to be completed by FY28, subject to customer-side timelines. The company is also supplying wagons to Cameroon and expects more export opportunities.
On valuation, Texmaco is trading at an EV/EBITDA ratio of 11 times. This is below its five-year average of 13.4 times. It is also below the industry median of 16.9 times. This suggests that the stock is trading at a valuation discount. However, return ratios remain modest. RoCE stood at 11.4%, while RoE was 7.6%. So the valuation comfort needs to be weighed against the company’s still-developing return profile.
Texmaco fits the fastest-growing railway stock theme through its three-year sales growth and sharper profit expansion. But the near-term picture is mixed. Revenue declined in FY26, while margins improved. The next phase will depend on wagon demand, export execution, rail-adjacent projects and the company’s ability to raise return ratios without taking on excessive risk.
In the past year, the share price of Texmaco Rail and Engineering tumbled 36.1%.
Texmaco Rail and Engineering 1-Year Share Price Chart
#3 Indian Railway Catering and Tourism Corporation: Defensive Monopoly Leveraged to Digital Platforms
Incorporated in 1999, IRCTC is a Navratna (Category 1, Central Public Sector Enterprises) and the only company authorized by the Indian government to provide online railway tickets, catering services, and packaged drinking water at railway stations and trains in India.
IRCTC has stayed among the more profitable railway-linked companies, even though its growth has been steady rather than sharp. Its three-year sales CAGR stood at 14%. Profit CAGR was 12%. Stock price CAGR was negative 8%, which shows weak market returns despite earnings growth. The company’s three-year RoE stood at around 37%, showing strong capital efficiency.
IRCTC: Growth, Returns & Valuation Snapshot
| Metric | Performance |
| 3-Year Revenue CAGR | 14% |
| 3-Year Profit CAGR | 12% |
| 3-Year Share Price CAGR | -8% |
| 3-Year Average RoE | ~37% |
| Market Share in Reserved Rail Ticketing | ~89% |
| EV/EBITDA (Current) | 19.7x |
| 5-Year Average EV/EBITDA | 38.4x |
| Industry Median EV/EBITDA | 20.6x |
| FY26 RoCE | 46.1% |
| FY26 RoE | 34.6% |
The main point is simple. IRCTC remains a high-return business, but the stock has not moved the same way. The company still has a strong position in railway ticketing. It also continues to grow earnings steadily. Even then, its valuation is much lower than its past average. This shows that the market is no longer willing to pay the same premium as before.
For FY26, IRCTC reported revenue from operations of Rs 5,215 crore, up 11.5% YoY. Total revenue rose 11.64% to Rs 5,475 crore. Profit after tax stood at Rs 1,393 crore, up around 6% from the previous year.
For Q4 FY26, revenue from operations stood at Rs 1,460 crore. This was up 15% YoY. Profit came in at Rs 447 crore, compared with Rs 472 crore a year earlier. The decline was mainly due to exceptional and legacy items.
Operational Segments and Catering Momentum
The company’s growth was led by catering, tourism and internet ticketing. Catering revenue rose 26.8% YoY to Rs 671 crore in Q4. The segment benefited from higher train catering operations, including premium train services. Internet ticketing revenue rose 4.56% to Rs 390 crore. The company continues to hold an 89% share in reserved railway ticket bookings.
Tourism also remained a key growth driver. The segment reported revenue of Rs 304 crore in Q4, up 10.95% from a year earlier. For the full year, tourism revenue rose 19.46% to Rs 890 crore. Management said tourism growth was supported by better product mix and cost control, even as geopolitical conditions remained challenging.
Rail Neer remained smaller but stable. Revenue stood at Rs 95 crore in Q4, up 3.26% year-on-year. IRCTC is expanding capacity at Ambernath and Danapur. It is also working on four new plants at Mysore, Prayagraj, Bhagalpur and Ranchi. The company said land has been received for Mysore and Prayagraj, while work is still progressing at the other locations.
Asset Monetization and Valuation Realignment
The next leg of growth will depend on platform expansion and better monetisation. IRCTC is investing in its e-ticketing platform. It is also working on a unified portal and iPay. Management said the company wants to increase non-convenience fee income and cross-sell travel services to its large passenger base.
On valuation, IRCTC is trading at an EV/EBITDA ratio of 19.7 times. This is far below its five-year average of 38.4 times. It is also slightly below the industry median of 20.6 times. The valuation is supported by strong return ratios. RoCE stood at 46.1%, while RoE was 34.6%. However, weak three-year stock returns show that the market has already moderated its expectations.
IRCTC fits the railway growth theme in a different way. It is not a manufacturing or infrastructure company. Its strength lies in ticketing, catering, packaged water and tourism. Growth is not the fastest in the railway universe. But the business remains highly profitable. The key monitorables will be catering margins, tourism growth, Rail Neer capacity addition and monetisation of its digital passenger platform.
In the past year, the share price of IRCTC tumbled 33.2%.
IRCTC 1 Year Share Price Chart
Conclusion
Railways remain a long-term story in India. The sector has government spending behind it. It also has steady demand from passengers, freight and related services.
But not every railway stock will benefit in the same way. Some companies depend on orders. Some depend on ticketing, catering or tourism. Some need strong execution to turn growth into profit.
The sales CAGR filter gives a useful starting point. It shows which companies have grown faster in recent years. But investors should also look at margins, return ratios, valuations and debt before taking a view.
Railway Growth Stocks: Growth vs Returns vs Valuation
| Metric | RailTel | Texmaco Rail | IRCTC |
| 3-Year Revenue CAGR | 30% | 25% | 14% |
| 3-Year Profit CAGR | 24% | 97% | 12% |
| 3-Year Share Price CAGR | 39% | 21% | -8% |
| FY26 RoCE | 22.8% | 11.4% | 46.1% |
| FY26 RoE | 17.1% | 7.6% | 34.6% |
| EV/EBITDA (Current) | 13.7x | 11.0x | 19.7x |
| 5-Year Average EV/EBITDA | 15.4x | 13.4x | 38.4x |
| Key Theme | Data Centres & ICT | Rail Exports & Diversification | Digital Monopoly & Tourism |
For now, the theme is still alive. The real test will be simple. Companies must convert the railway opportunity into steady revenue and better profits.
You can track how these are progressing by adding stocks to your watchlist.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep dive into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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