Indian Railway Finance Corp (IRFC): BUY Top Dividend Railway PSU Stock For 55% Gains Ahead; Target Rs 220

Indian Railway Finance Corporation (IRFC) is India's largest railway stock in terms of market share. This top dividend-paying stock has given extraordinary returns to its investors since 2023 and continues to do so far in 2024. However, IRFC shares have pulled back from their 52-week significantly, making it even better for fresh buying at a cheaper rate.

And double-digit upside is seen in IRFC so much so that this railway giant is expected to cross the Rs 200 mark and hit an all-time high of Rs 220. This is a potential upside of over 55% in IRFC in the near term.

At the time of writing, IRFC's share price traded at Rs 144.10 apiece, up by 1.69% on BSE with a market cap of Rs 1,88,317.17 crore.

Since 2023, IRFC shares went from merely a smallcap railway stock to largecap with market cap soaring to even over Rs 2 lakh crore when it touched an all-time high of Rs192.80 apiece. At present, even when IRFC shares are around Rs 145, it is still the largest railway stock under the PSU basket.

Currently, IRFC shares are up by nearly 425% from its 52-week low of Rs 27.47 apiece. YTD, the stock has gained nearly 44%, while in a year, the upside is by a huge 410.3%, In less than 4 years, IRFC shares are up by 480%.

Manas Jaiswal, the technical analyst has stated that IRFC shares may cross Rs 220 levels over the next six to eight months, reported CNBC-TV18. Although optimistic about IRFC, he also stated that IRFC above Rs 200 is likely to happen only when the share reaches over Rs 160 levels. He advised shareholders to exit their positions from IRFC if the share fell below the Rs 100 level.

Also, the consensus recommendation from 2 analysts for Indian Railway Finance Corporation Ltd. is BUY, as per Trendline.

The last time IRFC shares closed above Rs 160 levels was in the first week of February this year.

During the third quarter of FY24, IRFC's profitability was a mixed bag with a decline on the YoY level but an upside on the QoQ front. In Q3FY24, the company registered a net profit of Rs 1,602.23 crore, down by 1.8% from PAT of Rs 1,633.45 crore in Q3FY23, but gained by 5.4% from the profit of Rs 1,549.87 crore in Q2FY24.

In the case of the top-line front, IRFC's revenue was healthy on the YoY front, but slightly down from QoQ. In Q3FY24, IRFC's revenue was at Rs 6,741.86 crore, up by 8.4% YoY but down by 0.36% QoQ. The revenue was driven by interest income which came in at Rs 2,334.84 crore in Q3FY24.

In 2023, IRFC shares paid a dividend of 15% amounting to Rs 1.5 per share.

Recently, IRFC made key changes in its top management to thrive in business. The Railway Ministry appointed Uma Ranade as Chairman & Managing Director (Additional Charge).

Uma Rande is an IRAS officer a)atch of 1986). She has over 35 years of experience in Indian Rallways and is
currently an Additional Member (Budget) in the Ministry of Railway and is also holding the Charge of Additional
Membel. (Finance). She has held many important changes throughout her career, including Financial Advisor (Construction & Projects) to Western Raiilway, Central Railway, and South
Central Railways; as well as Principal Financial Advisor to both Western and Central Railways.

Holding a Miniratna status, Indian Railway Finance Corporation (IRFC) is the dedicated funding arm of Indian Railways.

The primary objective of IRFC is to meet the predominant portion of the 'Extra Budgetary Resources' (EBR) requirement of the Indian Railways through market borrowings at the most competitive rates and terms. The Company's principal business therefore is to borrow funds from the financial markets to finance the acquisition/creation of assets which are then leased out to the Indian Railways.

IRFC has also been lending to various entities in the Railway sector like Rail Vikas Nigam Limited (RVNL), Railtel, Konkan Railway Corporation Limited (KRCL), Pipavav Railway Corporation Limited (PRCL) etc.

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