In a historic milestone, the government has approved a budget of ₹1.53 lakh crore (up 110% from FY25) for railway projects in FY26 under the PM Gati Shakti National Master Plan. It aims to develop a world-class, high-capacity rail network covering more than 6,000 kilometers.
This budget covers a wide range of initiatives to enhance infrastructure, including the laying of new lines, line doubling, multi-tracking works, bypass, flyovers, and chord lines. This capital expenditure also covers over 35 projects, each involving an expenditure exceeding ₹1,000 crore.
- High-Density Network Projects: Targeted decongestion of congested routes to improve operational efficiency, punctuality, and passenger experience.
- Rail Sagar Corridor: to improve port connectivity and boost coastal trade.
- Strategic Freight Corridors: The expansion also targets the country’s logistics network (Maharashtra, Bihar, Jharkhand, and Madhya Pradesh). This aims to strengthen freight movement and boost industrial linkages.
- Mission 3000 MT & Energy Corridors: The budget also includes the Mission 3000 metric tonne (MT) initiative to increase overall cargo capacity. It also aims to facilitate the faster movement of coal and minerals, thereby strengthening national energy security.
This government spending is expected to reignite the order flows to infrastructure players. Against this backdrop, let’s look at three Railway companies expected to benefit from the budget tailwind…
#1 Titagarh Rail Systems
Titagarh Rail (TRSL) is a major railway and engineering company. It is the only Indian company to manufacture both freight wagons and passenger coaches. The company operates across diversified segments, including Freight, Passenger Rail, and Shipbuilding. It is now expanding into defence.
The Execution Pivot: Why FY26 is Different for Titagarh
TRSL has a dominant and an integrated presence in the Freight Rail Systems sector. It entered the freight wagon production space in 1997 through the forward integration of its steel-casting business and has since grown into a market leader.
Market Dominance: 25% Share and 12,000-Wagon Annual Capacity
It manufactures a diverse range of high-capacity, specialized freight wagons designed to serve various industrial needs. TRSL holds roughly a 25% share in Indian freight wagon manufacturing. It has the largest installed capacity in India, with a manufacturing capacity of 12,000 wagons per annum (1,000 wagons monthly).
Thus, Titagarh is expected to benefit from strengthening the freight corridors, considered the backbone of India’s logistics. In FY25, TRSL produced the highest-ever wagon (9,431 units). It became the only company in its segment to cross 1,000 wagon dispatches twice in consecutive quarters.
A strength of TRSL’s freight business is its backward integration through its foundry operations (the company’s maiden venture). It operates two large steel casting foundries with an annual capacity of 30,000 metric tonnes (MT), and is expanding this to 40,000 tonnes.
9MFY26 Financials: Navigating Supply Chain Disruptions and Revenue Dips
The Freight segment revenue was down 26% year-on-year to ₹1,919 crore, accounting for 84% of revenue. Profit before interest and tax stood at ₹229 crore, down 31.6%. The segment delivered 5,270 wagons during 9MFY26, down from the 6,976 wagons dispatched in 9MFY25. This decline was primarily attributed to temporary supply chain disruptions and wheelset shortages.
The 3 Billion Tons of Freight Loading Target
TRSL order book stood at ₹27,755 crore, of which 22.4% was from Freight Rail Systems. This provides revenue visibility of about 7X as per FY25 revenue. Looking ahead, it’s perfectly placed to capitalise on Indian Railways’ target of achieving 3 billion tons of freight loading by 2027-2030 and aims to secure a 40% market share in the national logistics sector.
The Strategic Pivot: Entering the Wagon Leasing and Maintenance Market
On 10 February 2026, TRSL received approval from the Ministry of Railways to register as a Wagon Leasing Company under the Wagon Leasing Scheme. This marks a strategic expansion, allowing the company to own railway wagons, lease them to private-sector customers, and enter the wagon maintenance market.
#2 Rail Vikas Nigam
Rail Vikas Nigam (RVNL) is a Public Sector Undertaking. It specializes in managing and executing large-scale public infrastructure projects, primarily for the central government. The company’s core focus is the railway sector. It has now diversified into Battery Energy Storage System, BharatNet, Roads, and Vande Bharat manufacturing.
Railways remain the company’s core, comprising approximately 45% of its total order book. RVNL is actively involved in railway infrastructure improvements, which include the doubling of existing railway lines and the construction of new rail corridors. In addition, it also has a major presence in railway electrification, signaling, and telecommunications.
Given its diverse presence, RVNL is also expected to benefit from 100 railway projects that will span a rail network of over 6,000 kilometers. Furthermore, RVNL stands to gain from the laying of new tracks and the development of new corridors in Odisha and Jharkhand, including electrification.
The company is exploring opportunities in solar power combined with battery storage systems. RVNL is bidding for Hybrid Annuity Model projects, particularly in road projects, that offer steady revenue streams over long concession periods (20-25 years). However, the road projects have faced tendering delays due to land and statutory clearance issues.
The ₹90,500 Crore Backlog: Can RVNL Diversify in Time?
RVNL currently holds an order book of almost ₹90,500 crore. This order book comprises Legacy railway nomination works (₹40,000 crore) and Bidding orders (₹47,000 crore). In terms of order composition, railway projects account for around 45% of the total orders, followed by the road sector (10%), electrical works (15%), and signaling and telecom (15%).
Financial Health: Margin Compression and 9MFY26 Performance
From a financial perspective, revenue increased by 1.6% year-on-year to ₹13,716 crore in 9MFY26. Operating profit fell 27.5% to ₹491 crore, while margins fell 140 bps to 3.6%. As a result, net profit fell 16.3% to ₹689 crore. Higher income from competitive bidding works has compressed margins.
The Road Ahead: Management’s 10% Growth Vision
The management expects a stagnant top-line growth of just 1% to 2% for FY26, and a potential dip in the bottom line due to the ongoing diversification. Moving forward, RVNL aims to achieve a sustainable 10% top-line and bottom-line growth per financial year.
#3 IRCON International
IRCON International (IRCON) is also a Navratna Central Public Sector Enterprise (CPSE) operating under the Ministry of Railways. The company is a major infrastructure player with a major focus on Railways, Engineering, Procurement, and Construction (EPC) projects, and Roads/Highways.
The core of IRCON’s business is large-scale transportation infrastructure. The company’s order book is heavily concentrated in these sectors, with Railways accounting for 75% and Highways for 18%. The company has a long track record of executing massive infrastructure projects, including track-laying, railway electrification, tunnels, and bridges.
Infrastructure Dominance: Analyzing IRCON’s ₹23,801 Crore Order Book
IRCON’s total order book stands at Rs. 23,801 crore, as per Q3FY26. Domestic projects account for approximately 91% of their total order book, while international operations make up the remaining. Much like RVNL, IRCON’s extensive presence across various segments of the railways positions it to benefit from the budget.
Financial Audit: Margin Expansion Amidst Revenue Headwinds
From a financial perspective, revenue declined 20% year-on-year to ₹5,882 crore in 9MFY26 due to slower execution. EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) fell 3% to ₹890 crore, while margins grew by 266 bps to 15.1%. Nonetheless, net profit declined 22.4% to ₹400.5 crore.
High competition while securing new jobs has led to lower margins on newly won domestic projects. IRCON expects revenue for FY26 to be in the range of ₹10,000 crore to ₹11,000 crore.
Beyond EPC: The Pivot to ‘Kavach’ and Renewable Energy
IRCON is moving into high-growth areas to diversify and hedge against sector-specific risks. This includes active expansion into the renewable energy and hydro power sectors. It is taking on specialized projects, such as installing the “Kavach” anti-collision system, Kavach towers, Video Surveillance Systems, and integrated tunnel communications.
The Valuation Trap: P/E Ratios vs. Historical Medians
Return ratios, especially Return on Capital Employed (ROCE) and Return on Equity (ROE), remain moderate across all three companies. Even then, they trade at elevated multiples relative to both their own historical median and the industry median.
| Peer Comparison (X) | |||||
| Company | P/E | 5Y Median P/E | Industry Median P/E | ROCE (%) | ROE (%) |
| Titagarh | 51.4 | 45.8 | 48.9 | 16.6 | 11.6 |
| RVNL | 49.4 | 23.5 | 17.1 | 14.7 | 14.0 |
| IRCON | 24.2 | 13.4 | 11.6 | 11.3 | |
| Source: Srceener.in (As of 13 April 2026) | |||||
The ₹1.53 lakh crore railway budget marks a sharp acceleration in India’s infrastructure push. Companies like RVNL, IRCON, and Titagarh stand to benefit from stronger order inflows, improved visibility, and a multi-year execution cycle.
However, valuations remain elevated, and earnings visibility still hinges on execution. Given the sector’s heavy dependence on government-led ordering, actual inflows will be critical. Any delay or slowdown in tendering could affect growth expectations. Meanwhile, keep them in your watchlist.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted, and widely used 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 educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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