The second quarter earnings season has officially kicked in as nearly 200 companies are scheduled to release their financial results for the September quarter in the coming week.
Railway PSU stocks like RVNL, IFCI, RailTel, IRCON will also be revealing their September quarter results soon. Stock market investors might wonder which PSU Railway stock to buy ahead of the results.
“Among Indian railway PSUs, choosing the most attractive stock ahead of Q2 FY26 results requires a careful evaluation of financial performance, order book strength, strategic initiatives, and long-term growth potential,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.
Why PSU Railway stocks are in focus?
Union Minister Ashwini Vaishnaw announced on Tuesday, October 7, that the Union Cabinet has cleared four major railway projects worth around ₹24,634 crore, covering 18 districts across four states. These projects aim to enhance freight handling capacity by 78.4 million tonnes. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, granted the approval.
The sanctioned projects include the 314 km Wardha–Bhusawal third and fourth lines, the 84 km Gondia–Dongargarh fourth line spanning Maharashtra and Chhattisgarh, the 259 km Vadodara–Ratlam third and fourth lines in Gujarat and Madhya Pradesh, and the 237 km Itarsi–Bhopal–Bina fourth line in Madhya Pradesh.
RVNL vs IFCI vs Railtel vs Ircon: Q1 results comparison
Srivastava further said that considering Rail Vikas Nigam Limited (RVNL), RailTel Corporation, IFCI (though a financial institution, it has limited railway exposure through infrastructure financing), and IRCON International Limited, the comparison highlights distinct risk-reward profiles.
Commenting on the Q1 results, book-order value, she further added –
RVNL
RVNL continues to benefit from its diversified project portfolio, including electrification, bridges, metro projects, and now a ₹90.65 crore video surveillance order from Southern Railway. Its strategic joint venture with Texmaco Rail (51% stake) positions it to enter rolling stock manufacturing, directly aligning with India’s railway modernization and Make in India initiatives. However, the company reported a 39.9% YoY decline in Q1 net profit to ₹134.53 crore on a 4% revenue drop, signaling near-term margin pressures. While its long-term projects and JV plans provide growth visibility, near-term earnings remain subdued.
RailTel
RailTel stands out for its strong Q1 performance, with a 33% revenue increase to Rs.744 crore and 36% net profit growth to Rs.66 crore. Project work, contributing Rs.409 crore, has been a key driver. The order book is healthy at Rs.7,197 crore, with recent orders including ₹210 crore from Bihar Education Project Council and ₹166 crore from BSNL. RailTel’s focus on rural broadband, PM Gati Shakti, and railway modernization initiatives positions it for sustainable growth. Although EBITDA margins are slightly compressed due to project execution costs, its diversified revenue streams, robust project pipeline, and planned capital expenditure of ₹350 crore make it a resilient pick.
IRCON
IRCON reported a challenging quarter, with a 26.7% drop in PAT to Rs.164.1 crore and a 21.9% decline in revenue, though EBITDA margins held at 17.1%. Execution delays impacted financials, but its massive ₹20,973 crore order book, including Rs.15,724 crore from railways, and strategic MoUs with Coal India provide a strong growth runway. The risk remains execution-dependent, and near-term results may remain volatile.
IFCI
IFCI, despite a turnaround in Q1, is not a core railway operator. Its negative capital adequacy and reliance on consolidation strategies make it less attractive for railway-centric investments.
Which PSU Railway stock to buy?
According to Srivastava, RailTel emerges as the most compelling pick for investors looking for stability and growth ahead of Q2FY26.
“Its strong Q1 performance, consistent order inflows, strategic alignment with government infrastructure initiatives, and manageable execution risks make it better positioned for near-term earnings momentum, while providing a sustainable long-term growth trajectory compared to RVNL and IRCON, which face near-term margin and execution challenges,” she added.
On the other hand, Anshul Jain, Head of Research at Lakshmishree Investment, believes that IFCI currently stands out with the strongest technical setup.
“The stock has already delivered a sharp 95% rally in just three weeks and has since been consolidating for the past 18 weeks, forming a solid base. This sideways movement has helped absorb prior gains and build strength for the next leg higher. A breakout above ₹61, supported by a surge in volumes, would confirm renewed momentum and could propel the stock toward the ₹80 zone. The low-volume consolidation indicates no major distribution, keeping the structure bullish and primed for another breakout,” Jain said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
