Indian Railway Finance Corp Ltd (IRFC) is a megastar of the railway basket on BSE and NSE, journeying from a smallcap to a largecap in 2023 to reaching new heights. There is more gains yet to arrive! In August 2024, IRFC witnessed a seesaw like performance from rallying to profit booking and new corrections. The stock ended August below Rs 180 levels and a downside of 5.9% on BSE. However, IRFC is still among the top performing railway stocks of 2024, and a multi-bagger in less than four years.
IRFC Share Price:
The stock price ended at Rs 178.65 apiece on BSE after market hours of August 30, the last trading day of the month. Its market cap is at Rs 2,33,468.86 crore. In the month, the stock was down by 5.9% on BSE.
However, year-to-date, IRFC shares are still up by 78% on BSE. But its all-time gains are humungous by 618.91%. The stock was merely at Rs 24.85 apiece by the end of January 2021, and since then has given impressive returns.
Notably, IRFC's all-time low is at Rs 19.30 apiece which was recorded on June 20, 2022, while its all-time high is of Rs 229 which was witnessed on July 25, 2024. From its record low levels to August 30, 2024, IRFC has skyrocketed by a breathtaking 825.6%.
IRFC Rewards:
IRFC has rewarded its investors with only dividends since its listing. As per Trendlyne data, since February 2021, the company delivered up to 7 dividends. In the last 12 months, the company distributed a dividend of Rs 2.20 per share.
Currently, it has a dividend yield of 1.23% which is also among the highest in the railway sector.
IRFC Fundamentals:
As per Trendlyne data, the fundamentals of IRFC are - the stock rose by 258.67% and outperformed its sector by 204.39% in the past year; while its Return on Equity(ROE) for the last financial year was 13.03%, in the normal range of 10% to 20%; further Mutual Fund Holding increased by 0.37% in the last quarter to 0.55; and Promoter Pledges are zero.
Among drawbacks for the stock as per the data are - Debt to Equity Ratio of 8.38 is higher than 1, which implies that company assets are financed through debt; and Price to Earning Ratio is 36.2, higher than its sector PE ratio of 20.51.
BUY/SELL IRFC?
The consensus recommendation from 2 analysts for Indian Railway Finance Corporation Ltd. is BUY, as per Trendlyne.
Also, IRFC is yet to touch Prabhudas Lilladher's long-term target price of Rs 250.
In its latest report, Prabhudas said, "The stock has been consolidating for quite a while near the 178 zones of the long-term trendline support level after the decent correction from the peak zone of 229 levels and has indicated signs of improvement moving past the significant 50EMA level of 183 and with bias getting better is anticipated to rise further in the coming days. With the RSI cooling off from the overbought zone has arrived at an attractive zone with a positive trend reversal indicated to signal a buy and has much upside potential from the current zone. With the chart looking good, we suggest buying the stock for an upside target of 230-250 keeping the stop loss of 164."
Indian Railway Finance Corporation (IRFC) was set up on 12th December 1986 as the dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas Capital Markets. IRFC is a Schedule 'A' Public Sector Enterprise under the administrative control of the Ministry of Railways, Govt.
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.
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