Railway stocks were racing in on Tuesday as Ashwini Vaishnaw retained his position as Railway Minister in the National Democratic Alliance’s (NDA) new cabinet, signalling policy continuity and soothing investors’ fears.

What Happened: Goldman Sachs said it expected the new government would adhere to a fiscal consolidation path, maintaining a focus on infrastructure creation through an expanded rail network, with a slight emphasis on rural spending.

Meanwhile, RailTel Corp anticipates a robust order book from railways this year, CNBC-TV18 reported. Chairman and Managing Director Sanjai Kumar indicated that ₹1 lakh crore worth of signaling systems were likely to be implemented by railways over the next four to five years.

The firm also expected Kavach orders worth ₹4,000 crore-₹5,000 crore, which is almost equivalent to its current order book, bolstering the stock price surge.

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Following a slimmer mandate for the NDA, railway company stocks nosedived as investors sought to book profits. Nomura Holdings noted that investors were concerned about the compromises the Narendra Modi-led Bharatiya Janata Party would need to make in forming a coalition government.

Leading up to the election results, several brokerages had anticipated substantial benefits for sectors such as public sector firms and railways from Modi’s potential return to power, despite already high valuations. However, market sentiment shifted sharply when the election outcome did not meet expectations.

With Vaishnaw’s retention as Railway Minister, investors expect the central government to continue its growth-oriented policy initiatives.

The railway minister will oversee the execution of several significant initiatives in the Centre's 100-day agenda, including overhauling capacity and safety infrastructure, introducing bullet trains to India and enhancing the digital user experience with a super app.

Price Action: Ircon International shares increased by 6.42% in early trade, while RailTel shares experienced an almost 7.1% rise. RVNL shares added 4.09%, supported by recent order wins, and IRFC shares also gained almost 1.96%.

IRCTC shares climbed 5.02% and Rites gained 3.71%. Container Corp jumped 3.35% while Titagarh Rail Systems edged up 0.6%.

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