Flat capex for railways may hit suppliers

The pace of capital expenditure by Indian railways has slowed with the Budget allocating just Rs 2.52 lakh crore, to the transporter in FY26 which in real terms denote a marginal year on year decline. The squeeze comes amid strict controls on market borrowings by the transporter via its arm IRFC.

The leading suppliers to railway projects and EPC contractors like BEML, BHEL, ABB, Siemens, KEC International etc. may be impacted with lower growth in new orders from the transporter.       

“By taking inflation into account, this would be considered a negative growth. Barring some exceptions, almost all expenditure items have received similar allocations for the next year. This will hit the order flow growth which the industry was expecting prior to the budget,” said Harshit Kapadia, VP (consumer durables, electrical & capital goods) at Elara Securities. “With defence and housing getting a larger share of the capex allocation, the government is looking beyond railways and road for asset creation and boost consumption,” said analyst at a brokerage firm.

Even though the allocation for the rolling stock has remained flat at Rs 58,895 crore in FY26, the manufacturing target for coach production has jumped over 19%. Experts said that this is a sign that railways is shifting its focus towards producing more non-AC coaches going forward. “We could see production of more Amrit Bharat train coaches and general non-AC coaches this year,” said a former railways official.

Recently, the railway minister Ashwini Vaishnaw said that over the next three years, the railways will introduce 100 Amrit Bharat trains, 200 new Vande Bharat trains, 50 Namo Bharat rapid trains in addition to 17,500 new general non-AC coaches. “These new trains and modern coaches will benefit the middle and lower-income groups,” Vaishnaw said after the Budget.

Meanwhile, the allocation towards Kavach, India’s automatic train protection system, has grown at a modest pace too. For instance, the allocation for signaling and telecommunication works has been allocated Rs 6,800 crore in FY26 as compared to Rs 6,006 crore spent in FY25. Kavach, earlier known as train collision avoidance system (TCAS), has been indigenously developed by Research Designs and Standards Organization (RDSO) with three Indian approved vendors – Kernex Microsystems, HBL Engineering and Medha Servo Drives.

 » Read More

Related Articles

8th Pay Commission: Central govt to merge pay scales for Level 1-6 employees? Here’s what the new proposal says

8th Pay Commission: The National Council of Joint Consultative Machinery (JCM) Staff Side has submitted its recommendations for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), advocating significant changes in pay structure, allowances and benefits for government employees. Among the key points of ToR is the proposal for merger of certain

Bharti Airtel Q3 Results: Profit surges 505.24% to Rs 14,781.20 crore, ARPU at Rs 245

Bharti Airtel on Thursday posted a profit of Rs 14,781.20 crore during the third quarter of FY25, reporting a growth of 505.24 per cent in comparison to Rs 2442.20 crore during the corresponding quarter of FY24. The telecom major recorded Q3 revenue from operations at Rs 45,129.30 crore, up 19.08 per cent as against Rs

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

8th Pay Commission: Central govt to merge pay scales for Level 1-6 employees? Here’s what the new proposal says

8th Pay Commission: The National Council of Joint Consultative Machinery (JCM) Staff Side has submitted its recommendations for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), advocating significant changes in pay structure, allowances and benefits for government employees. Among the key points of ToR is the proposal for merger of certain

Bharti Airtel Q3 Results: Profit surges 505.24% to Rs 14,781.20 crore, ARPU at Rs 245

Bharti Airtel on Thursday posted a profit of Rs 14,781.20 crore during the third quarter of FY25, reporting a growth of 505.24 per cent in comparison to Rs 2442.20 crore during the corresponding quarter of FY24. The telecom major recorded Q3 revenue from operations at Rs 45,129.30 crore, up 19.08 per cent as against Rs

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

Two banking stocks to watch ahead of the RBI Policy

By Kiran Jani Bank Nifty reached its all-time high of 54,467 in September 2024. Following this peak, the index experienced a correction, dipping to 47,844 in January 2025—a decline of 7.29%. Despite this pullback, Kotak Bank and ICICI Bank showed relative resilience, delivering returns of 1.61% and -4.20%, respectively, during the same period. Source: Investing.com

New Tax Regime: These deductions, exemptions still available for you

The Indian government introduced a new tax regime in 2020, offering lower tax rates while removing several exemptions and deductions available under the old system. Initially optional, this regime became the default in 2023, requiring taxpayers to opt out if they wished to continue under the old structure. Despite the removal of many benefits, certain