Indian Railway Finance Corp (IRFC): Top Railway Stock Rises 18% In 1 Week, Dividend Ahead; Buy For Rs 190 TP

India's largest railway stock and an NBFC, Indian Railway Finance Corporation (IRFC) rose by 18% in 1-week, as its engine's accelerated to cross Rs 170 mark, a key breaking point for further bullish trend ahead. In the short term, IRFC shares are expected to give 5-9% returns with target prices set between Rs 180 to Rs 190 by brokerages. Key trigger for IRFC will now be its upcoming Q4 results, final dividend for FY24, and market borrowing programmes for FY25.

IRFC is a multibagger, one of the biggest winner on BSE and NSE since last year under the PSU basket. The PSU's fundamentals and technical indicators look favourable too.

IRFC Share Price:

This railway giant stock ended at Rs 173.20 apiece, up by 2.61% in the special trading session on Saturday, with a market cap of Rs 2,26,346.52 crore.

This week alone, from May 13 to May 18th, IRFC shares have skyrocketed by a whopping 18.4% on BSE. YTD, the stock is up by 73% on the exchange. While in a year, IRFC shares have zoomed by a breathtaking 417.46% as of now. Its all-time gains is a massive 598%. The stock was merely at Rs 24.85 on January 29, 2021.

IRFC Q4 Results:

It will be keenly watched if IRFC performs better than previous quarter. In Q3FY24, the 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.

While 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.

The upcoming Q4FY24 results is scheduled on Monday, May 20, 2024.

IRFC Dividend:

As per the regulatory filing, IRFC announced that it will also recommend final dividend for FY24, if any on May 20.

This will be first dividend payout of 2024. While in 2023, IRFC paid a dividend of 15% amounting to Rs 1.5 per share.

IRFC Short Term Target Price:

In its technical pick, HDFC Securities said, The weekly 10/20 period EMA have been offering supports for the stock price to move up in the last few months," adding, "Weekly 14 period RSI has started to turn up from near the key upper area of 60 levels. Hence, one may expect strong upside momentum in the short term."

As per HDFC Sec, the overall chart pattern of IRFC indicates long trading opportunity. One may look to create positional buy in the stock.

HDFC Securities continues to be BUY on IRFC shares and has suggested target price of Rs 185 for short term and the time frame is 2 months. This would imply a potential of 6.8% target in IRFC ahead.

Also, Prabhudas Lilladher earlier in May said, "The stock has been in a rangebound consolidation period and once again from the level of 142 it has picked up to move past the important 50EMA level of 141.50
improving the bias and is anticipated to perform well in the coming days."

Prabhudas note added, "The RSI has shown improvement with a trend reversal indicated signaling a buy and has potential to carry on with the positive move further ahead. With the chart looking attractive, we suggest to buy the stock for an upside target of 195 level keeping the stop loss of 131 level." This would imply a potential surge of 9.7% in IRFC if taken into consideration the highest target price.

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