Indian Railway Finance Corp Dividend: This Railway Stock Turns Rs 1 Lakh To Rs 2.70 Lakh Corpus In 1 Year

Indian Railway Finance Corporation (IRFC) has shown remarkable performance in the past 1 year and emerged as a multi-bagger. Traders have recorded huge returns on their portfolio as the stock's yearly gain is nearly 171% on BSE. An investment of Rs 1 lakh has turned into a corpus of over Rs 2.70 lakh in 12 months. There is more potential upside in IRFC ahead.

IRFC is an Indian Railways-backed stock that has been in the news for its strong Q2 results and hefty dividend payout in recent times. Not just that IRFC shares have remained under Prabhudas Lilladher's technical pick since November 6th for a target price of Rs 90 per share. Currently, the stock is near Rs 76 level. Its market cap is nearly Rs 1 lakh crore mark.

On November 20th, IRFC shares corrected and stood at Rs 76.08 apiece on BSE with a market cap of Rs 99,425.19 crore.

So far in 2023, IRFC shares gained by 131.25% on BSE, while in a year, the stock price rallied by 170.75% at least.

Let's suppose, that traders invested Rs 1 lakh on November 21 last year, IRFC shares were at Rs 28.10 at that time. This investment has skyrocketed to a whopping Rs 2,70,747 corpus as of now at the current market price. Also, IRFC shares have surpassed Sensex whose yearly upside is 7.4%.

Earlier this month, IRFC shares turned ex-dividend on November 10th for an interim dividend of Rs 0.80 per share having a face value of Rs 10 each. As per the filing, the dividends will be paid in the account of the shareholder(s) or the dividend warrant(s) in respect thereof will be dispatched within thirty (30) days from the date of declaration of the interim dividend.

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.

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.

From this price level and PL's target price, IRFC shares have a potential of more than 18%.

Also, as per Trendlyne website, the consensus recommendation from 2 analysts for Indian Railway Finance Corporation Ltd. is BUY. IRFC is trading above 8 out of 8 SMAs, and it is also trading above 7 out of 9 Oscillators in the bullish zone.

Furthermore, IRFC's relative strength index (RSI) is in mid-range at 57.2, however, its money flow index (MFI) is overbought at 73.6. Nevertheless, Trendlyne refers to IRFC in the 'Turnaround Potential stocks' category which are those with low to medium durability scores, moderate valuation and rising momentum. Also, increasing momentum suggests that these stocks may have a potential for recovery.

Additionally, IRFC's Trendlyne momentum score is at 74.3 which is considered technically Strong. Further, the MACD signal is at 0.4 which is a bullish indicator.

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.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor 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.