How Railway Budget of 2024 Became a Boon for IRCTC?

Stocks are often affected by various factors including the budget announcement. Different sectors have different effects based on the new changes implemented. For instance, when focusing on the Union Budget of 2024 proposed by the Government of India (GoI), the railway sector is likely to boom.

This is because of the government’s commitment to developing and modernizing the country’s railway sector, and due to this decision, the Indian Railway Catering and Tourism Corporation (IRCTC) has emerged as one of the top beneficiaries.

In this blog, we will explore how the IRCTC share price has been impacted by the Railway Budget of 2024!

Highlights of Railway Budget 2024

As per the interim budget announced by the Finance Minister, the government has proposed three major economic railway corridors to enhance the efficiency of the logistics while reducing the costs incurred.

This railway budget allocated aims to decongest the high-traffic corridors, improving both the safety and speed of traveling for the passengers. In addition, about 40,000 normal bogies will be converted into high-speed Vande Bharat bogies to enhance comfort and cut down travel time.

To achieve these objectives, the Union Ministry of Railways has been allocated Rs 2.55 lakh crores for the FY 2024-25. This is a 5.8% increase in the railway budget compared to the previous financial year.

This implies that the government has allocated a fresh Rs 7 lakh crore to develop rail infrastructure.

How Will IRCTC Benefit from the Budget?

The current market sentiment is optimistic that the government of India will continue to invest in developing the railway infrastructure, which has encouraged investors to buy shares of companies such as IRCTC.

The increased budget for railways will also be utilized in expanding the Bharat Gaurav trains which will help people witness the rich heritage and culture of India. IRCTC will be responsible for spearheading and organizing this rail tourism. For this purpose, it will also receive enhanced funding and employ superior rail services, boosting its revenue. 

Additionally, with a focus on improved infrastructure, it will become more convenient and safe to travel by train which will increase the demand for railway tickets. This again implies that IRCTC will experience a boom in ticketing and catering services generating higher revenue.

Lastly, private and public partnerships have also been proposed in the budget and IRCTC can potentially leverage these partnerships to innovate, expand its own service quality, and improve its efficiency.

With these improvements seeming likely in the upcoming future, investors are optimistic about an improvement in the financial records of IRCTC which has led to a boost in its share price!

Conclusion

The railway budget of 2024 is a step towards modernising Indian railway infrastructure which will ultimately boost all the railway companies in India.

However, when deciding if you should invest in the stocks of IRCTC, ensure that you consider other factors such as the political scenario of the country. Lastly, monitor the IRCTC share chart to determine the best entry and exit points to make the most out of this railway budget allocation!