Budget 2026: Railways may get a big Capex boost, know what are the expectations

News Topical, Digital Desk : Finance Minister Nirmala Sitharaman will present her ninth consecutive budget tomorrow, February 1st. Budget 2026 will be announced in Parliament at 11 a.m. This time, all eyes are on the railway sector, as it is the backbone of the country's economy. Last year, the railways received a good budget, and this year too, an increase in capital expenditure is expected.

Experts believe that the railways could once again receive a significant capital expenditure in Budget 2026. According to 29 economists surveyed by Bloomberg, the government may increase spending on infrastructure sectors such as roads, ports, and railways, with the aim of strengthening the country's connectivity and accelerating economic growth.

There may be an increase of 8 to 10% in Capex.
Experts say that the Capex of Railways may increase by 8 to 10% year on year. This will accelerate the pace of approval of new railway projects and will benefit the companies related to infrastructure.

There may be a focus on safety in the budget.
Experts of Bajaj Broking believe that this time there may be a special emphasis on railway safety in the budget. The focus may be on modern security systems like Kavach, modernization of stations, increasing the speed of trains and improving the facilities for passengers.

Additionally, investment in logistics and multimodal connectivity is also expected to increase. According to experts, rail-based freight corridors, logistics hubs, and green infrastructure will reduce trade costs, increase employment, and boost GDP.

What did last year's budget provide?
 

• In Budget 2025, the central government allocated ₹2.52 lakh crore to the railways for continuous improvement.
  Railway Minister Ashwini Vaishnav stated that this was gross budgetary support. In her budget speech, FM Sitharaman stated that the railways would develop new products and logistics services for small farmers and SMEs. Integrating the postal and railway networks would simplify parcel movement.
• Over the next three years, 400 new-generation Vande Bharat trains will be manufactured, which will be more energy-efficient and offer a better riding experience. Railway Minister Vaishnav separately stated that ₹4.6 lakh crore had been allocated for infrastructure development projects and ₹1.16 lakh crore for safety. Overall, capex reached ₹2.65 lakh crore.

Stocks to Watch:

Experts believe that the government's focus on railways is already significant, and expectations regarding the budget were already high, which has largely factored these expectations into current valuations. Consequently, the budget's impact may be more stock-specific than sector-wide. Brokerages, including Axis Securities, believe that station redevelopment and safety upgrades will remain priorities. The government will also focus on accelerating work on economic railway corridors under PM Gati Shakti, adopting Kavach 4.0, and a strategy to accelerate the implementation of advanced signaling systems. Consequently, companies with strong order books, strong execution capabilities, and clarity on upcoming projects are expected to perform better.

Among PSU companies, RITES is considered a favorite due to its consultancy-based business model and strong connections to railway and infrastructure projects. In the non-PSU segment, investors are eyeing Titagarh Rail Systems, which is being supported by rolling stock demand, capacity expansion, and export opportunities.

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