IRFC's Engines Soar To Moon: Railway Stock Gains 47% In 6 Days, Eyes Rs 150; When To Expect Rs 1000 TP?

One Railway Stock has been accelerating to the moon. So far in January 2024, the curve of this stock has shot up to a slanting line, giving nearly 50% return in six days, and rising by over 460% since its IPO listing. Without any further ado, this stock is none other than the rising star Indian Railway Finance Corporation (IRFC). Railway stocks are in a strong rally ahead of Ram Mandir's inaugration in Ayodhya on January 22.

When IRFC's share price was listed on BSE and NSE, it had an IPO price of Rs 26 per share. Its listing day closing price was Rs 24.85 apiece on BSE. The stock's market debut was on January 29, 2021.

A year ago, on January 17, 2023, the stock price was even below Rs 33 mark to Rs 32.65 apiece.

Time skip, currently, IRFC share price is chasing the Rs 150 mark! But looking at the sharp surge in IRFC, it makes one wonder when will this overwhelmingly high-dividend paying stock touch the Rs 1,000 mark.

On January 16, IRFC share price ended at Rs 141.77 apiece, up by 8.96% on BSE. Its market cap is currently over Rs 1.85 lakh crore. Overall, in the day, IRFC shares have zoomed by 13% as they touched a new all-time high of Rs 146.69 apiece.

But IRFC shares have been on a winning streak for a sixth consecutive day now. From January 9th to 16th, the stock rallied by 46.7% on the BSE. Before that, the share price was at Rs 99.97 apiece as of January 8, 2024.

IRFC's six-monthly performance is an upside of 336.62%. But the stock has skyrocketed by 464.19% against its IPO issue price. The surge is even more extraordinary by 490.30% against its listing day closing price.

IRFC launched its Rs 4,633.38 crore IPO from January 18 to 20 of 2021. On the final day, the IPO had subscribed by 3.49 times.

In recent times, railway stocks have witnessed a stellar bull run so far owing to key factors like investment programs during fiscal years 2024-31, developments in the G20 Summit, and improvement in businesses. Also, budget allocation is highest in this sector for FY24, production of Vande Bharat trains, and measures for revamping and enhancement of railway coaches and services. Following these developments, the majority of railway stocks have given triple-digit returns in 2023.

So when will IRFC shares touch the Rs 1,000 mark?

The We Invest Smart website which analyses the performance, prospects, strengths, weaknesses, opportunities and threats for Indian stocks, revealed that the consensus of analysts for IRFC shares is 'BUY'.

It explained that IRFC finds itself at the cusp of significant growth, closely tied to the expansive modernization and expansion efforts of the Indian Railways. As the Indian Railways undergoes a transformative phase, IRFC's role and growth potential become increasingly pivotal.

For 2024, the minimum target price for IRFC is Rs 161.34 and maximum up to Rs 176.18. Meanwhile, over the Rs 300 mark in IRFC is expected from 2027 with minimum and maximum target price of Rs 315.12 to Rs 344.10. Further, IRFC is expected to cross the Rs 500 mark by the end of 2029, and in 2030, the target price range is Rs 615.46-672.07. IRFC shares are expected to cross the Rs 1,000 mark by the end of 2032 with the maximum target being Rs 1,050.11. IRFC's target price range is Rs 1,202.08 to Rs 1,312.64 in 2033, as per We Invest Smart.

Indian Railway Finance Corporation Limited (IRFC) was incorporated as a public limited company on 12th December 1986 by the Ministry of Railways, as a wholly Government-owned public financial institution to raise resources to meet the developmental needs of the Indian Railways.

IRFC's sole objective is to raise money from the debt Capital markets to part-finance the plan outlay of Indian Railways. The money so made available is used predominantly for the acquisition of new rolling stock assets to be leased to Indian Railways or developing railway Infrastructure. IRFC's funding has supported technology infusion in the Railways. For instance, it has enabled the Ministry of Railways to purchase new-generation Locomotives from General Motors (USA) along with the transfer of technology and new-generation Coaches from Germany for use in high-speed trains.

During Q2FY24, the company posted a net profit of Rs 1,549.87 crore as against Rs 1,714.28 crore in Q2FY23 and Rs 1,556.57 crore in Q1FY24. Total revenue from operations stood at Rs 6,766.32 crore compared to Rs 5,809.80 crore in Q2FY23 and Rs 6,679.17 crore in Q1FY24.

Also, the company's FY2022-23 has been another year of strong financials. Revenue from operations of the Company has increased by Rs 3,593 crores from Rs 20,298.27 crores in 2021-22 to H 23,891.27 crores in 2022-23, showing a growth of 17.70%. Profit before Tax (PBT) of the Company for the year ended 31st March 2023 was Rs 6,337.01 crores as compared to Rs 6,090.15 crores for the previous year, registering a growth of 4.05%. Total disbursement for FY 2022-23 was Rs 32,392.63 Crores comprising Rs 17,000 Crores for funding of Rolling Stock, Rs 15,392.63 Crores for financing of Railway Projects under EBR- IF.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.