Five beaten-down railway stocks to watch

After a strong run over the past few years, railway stocks have entered a period of correction, with valuations cooling and execution concerns weighing on sentiment.Yet the broader story remains intact.The Union Budget 2026-27 has announced a record ₹2.93 trillion (tn) allocation toward railways, focused on capacity expansion, modernisation, and network upgrades.This creates a steady pipeline of orders across segments, from rolling stock to EPC and signalling.In this backdrop, we examine five beaten-down railway stocks.#1 Texmaco Rail & EngineeringTexmaco Rail, an Adventz group company, is a leading player in the Indian railway manufacturing. It’s the largest wagon supplier to Indian Railways with a production capacity of 12,000 to 15,000 wagons.It designs and manufactures a diverse range of freight rolling stock for the government, the private sector, and export markets.Also, Texmaco is one of India’s largest exporters of foundry goods.

The management is expanding this division, aiming to increase export volumes from 5,000 metric tons (MT) to 20,000 MT.As of 31 December 2025, Texmaco's order book stood at a robust ₹5,660 crore.The company is in the midst of a strategic reset under ‘Texmaco 2.0’, a roadmap that seeks to double its scale while lifting Ebitda margins. The initiative is designed to reduce the inherent cyclicality of the freight wagon business by diversifying revenue streams and building a more stable earnings profile.To this end, it plans to enter into the manufacturing of urban mobility solutions, including metro and EMU passenger coaches.