IRFC Shares Jump Over 7% as Pre-Budget Optimism Lifts Railway Stocks

Shares of Indian Railway Finance Corporation (IRFC) surged sharply in early trade on Friday, emerging as one of the top-performing public sector stocks as investors returned to railway-linked counters ahead of the Union Budget.

At around 10:32 am, IRFC shares were trading 7.42% higher at Rs 130.50 on the BSE, supported by strong volumes and renewed buying interest. The rally reflects a combination of pre-Budget positioning, expectations of sustained railway capital expenditure and improving confidence in the company’s funding outlook.

Pre-Budget optimism lifts railway stocks

A key trigger for IRFC’s rally is growing optimism ahead of the Union Budget 2026. Railway-related stocks typically see increased investor interest in the run-up to the Budget, as markets anticipate continued government focus on infrastructure and transport spending.

As the primary financing arm of Indian Railways, IRFC plays a critical role in funding rolling stock procurement, network expansion and large-scale railway projects. Expectations that railway capex will remain strong have reinforced the stock’s medium-term appeal.

Improved funding visibility boosts sentiment

Investor confidence has also been supported by better visibility on IRFC’s borrowing profile. Relative stability in interest rates and expectations of manageable funding costs have eased concerns around margins and long-term profitability.

For a PSU financier like IRFC, predictability of cash flows and borrowing costs is crucial. Improved clarity on these factors has made the stock more attractive after months of subdued performance.

Valuation comfort after muted performance

IRFC shares had underperformed broader markets through much of 2025, weighed down by profit-booking and limited near-term growth expectations. That phase of underperformance has now created valuation comfort for investors looking for stable, dividend-paying PSU stocks with strong policy backing.

Market participants say the current rally appears driven more by accumulation than short-term speculation.

What investors will watch next

Going forward, the sustainability of IRFC’s gains will depend on Budget announcements related to railway capital expenditure, borrowing plans and funding requirements. While the stock may not deliver rapid upside, investors appear to be positioning for steady returns backed by policy continuity and balance-sheet stability.