Mumbai, Dec 29 : Indiaâ??s railway stocks are showing signs of recovery after a long period of weakness, with the sector witnessing a sharp rally over the past five trading sessions.

The recent surge has added more than Rs 66,500 crore to the market value of railway-linked companies, as investors reposition ahead of the Union Budget and respond to improving revenue signals.

Railway stocks had remained under pressure for most of 2025 after the sector peaked in July 2024.

Since then, many stocks corrected sharply as high valuations cooled and expectations around policy support eased.

The latest rebound suggests a cautious return of investor interest, driven by a mix of fare hikes, budget hopes and company-specific developments.

The rally has been led by Jupiter Wagons, whose shares jumped nearly 37 per cent in just five days, making it the best-performing railway stock in the recent upswing.

Rail Vikas Nigam Limited rose around 27 per cent, while Indian Railway Finance Corporation gained more than 20 per cent during the same period.

Other railway-related companies such as Ircon International, Titagarh Rail Systems, RailTel Corporation of India, Texmaco Rail & Engineering, RITES and BEML also posted strong double-digit gains.

Despite the sharp bounce, most railway stocks are still trading well below their previous highs.

One of the key triggers behind the rally has been Indian Railwaysâ?? decision to revise passenger fares from December 26.

This marked the second fare hike in FY26, with long-distance travel fares increased by 1 to 2 paise per kilometre across ordinary, Mail and Express trains.

The move is expected to bring in nearly Rs 600 crore in additional revenue during the remaining part of the financial year, while suburban services have been kept out of the hike.

Passenger train operations continue to run at a loss, with fares estimated to be around 45 per cent below cost.

These losses are largely subsidised through freight earnings. The latest fare rationalisation is expected to improve revenue visibility and help reduce losses in passenger services, supporting efforts to improve the railwaysâ?? operating ratio.

/IANS