Railway Stocks: Government Places a Big Bet on Three Rail Companies—Know These Important Points Before Investing..
The railways are the lifeline of India. You have likely heard this statement hundreds of times. This is precisely why companies associated with the railway sector are currently generating a significant buzz in the stock market. If you, too, are interested in investing in the stock market, you should definitely keep a close watch on the developments within the railway sector. This is because the Indian Railways bears the primary responsibility—not only for transporting passengers—but also for moving essential commodities such as coal, cement, steel, and food grains from one corner of the country to another. Currently, the government is also actively engaged in a comprehensive transformation of the railways, resulting in a massive influx of new orders for companies operating in this sector. Three specific railway-related companies have astonished everyone with their earnings performance over the past three years. These have proven to be "multibaggers"—stocks that generate returns far exceeding their initial investment—but what does the future hold for them? Let's find out from the experts.
**RailTel Corporation’s Digital Revolution**
RailTel Corporation is a public sector undertaking (PSU) under the Indian Railways, primarily tasked with connecting railway stations and trains to a digital network. This company manages the internet, Wi-Fi, and data network facilities available at approximately 6,000 railway stations across the country. Over the last three years, the company's total revenue has grown at an annual rate of 30%, while its net profit has surged at a rate of 24% year-on-year. Investors who purchased shares of this company three years ago have enjoyed an impressive average annual return of 39%.
The company's greatest strength lies in its robust order book, which signifies that it already possesses a substantial volume of work secured for the future. In March 2025, the company held orders worth ₹4,602 crore; by April 2026, this figure had risen to ₹6,346 crore. The company's management projects that by the end of March 2027, this figure will surpass the ₹8,500 crore mark. In the final quarter of 2026, the company's net profit surged by 46% to reach ₹113 crore. Now, RailTel is no longer content to limit its operations solely to the railway sector. This company is making rapid strides in the data center business. A major facility has already commenced operations in Manesar, and preparations are underway to establish new centers in major cities such as Mumbai.
**Texmaco Rail’s New Avatar**
Texmaco Rail & Engineering is a private sector company that has, for years, been engaged in the manufacturing of railway coaches (wagons) and heavy-duty bridges. Over the past three years, the company has shattered profit records, with its net profit growing at an impressive annual rate of 97%. Although the company witnessed a slight decline in sales during the final quarter of 2026, its net profit nevertheless surged by 46%, reaching ₹58 crore. For the full financial year, the company posted a total profit of ₹194 crore.
The company is now executing a specific strategic initiative dubbed "Texmaco 2.0." Under this plan, the company will no longer rely solely on the manufacturing of railway coaches. It is now poised to manufacture components for 'Kavach'—India's indigenous, state-of-the-art technology designed to prevent train collisions—as well as for metro rail systems, signaling infrastructure, and the defense sector. Furthermore, the company is actively expanding its business operations internationally; currently, Texmaco exports its products to 16 countries across the globe. The company has recently secured a massive order from South Africa, under which it will supply 2,200 wagons and 30 diesel locomotives (train engines) to the region, while also assuming responsibility for their maintenance and upkeep over the next 15 years.
**IRCTC: A Ubiquitous Presence**
The name IRCTC is familiar to anyone who has ever traveled by train. Whether it involves booking railway tickets online, ordering meals on a train, purchasing 'Rail Neer' bottled water, or booking tour packages for leisure travel, this public sector enterprise maintains a dominant presence across every facet of the railway ecosystem. You might be surprised to learn that approximately 89% of all reserved tickets booked online in the country are booked through this platform alone. During the entire last fiscal year (FY2026), the company's revenue grew by 11.5% to reach ₹5,215 crore, while its total net profit was recorded at ₹1,393 crore.
In the final quarter of 2026, the company's profit declined marginally to ₹447 crore due to certain exceptional expenses; nevertheless, its business operations remain robust. The company derives the majority of its earnings from its catering and tourism businesses. In this quarter, revenue generated from catering surged by 27% to reach ₹671 crore. IRCTC is further strengthening its digital infrastructure to ensure a seamless experience for users while booking tickets. To this end, the company is actively promoting its proprietary payment gateway, 'iPay'. Additionally, in view of the high demand for 'Rail Neer' bottled water, new production plants are being established across the country.
Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
