Shares of Indian Railway Finance Corporation Ltd (IRFC) continued their upward march for the sixth straight session in Tuesday's trade. The stock surged 12.74 per cent to hit a one-year high of Rs 146.69. At this price, the scrip has gained 46.73 per cent in six days. And, the multibagger counter has rallied more than 330 per cent in a year.
"With Budget around the corner, railways stocks have been witnessing sharp gains. It could be due to anticipation of a record budgetary allocation for the sector," said Vishal Periwal, Sector Analyst (Infra) at IDBI Capital. Union Budget 2024-25 will be presented on February 1.
On technical setup, the counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) came at 91.54. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a price-to-equity (P/E) ratio of 28.02 against a price-to-book (P/B) value of 3.57. Support on the counter could be seen around Rs 120 level.
"IRFC witnessed a strong spurt and continued its northward march into uncharted territory. The stock seems poised to carry momentum further. A series of support can be seen in the Rs 120-115 zone while sacrosanct support lies around Rs 105-100 zone. As the counter is in an uncharted zone with no specific technical resistance, it is advisable to keep trailing profits regularly," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
"The stock has witnessed a decent spurt. With the bias maintained strong, we expect further upward move for next targets of Rs 148-164. From current levels, the support would be at the Rs 125 zone and only a decisive breach below Rs 114 level shall weaken the trend overall," said Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.
The stock may see Rs 150 level in the near term, said DRS Finvest founder Ravi Singh. Keep a strict stop loss placed at Rs 120, he mentioned.
"IRFC is bullish but also overbought on daily charts. Investors should book profits at current levels as a daily close below support of Rs Rs 120 could lead to target of Rs 99 in the near term," said AR Ramachandran from Tips2trades.
IRFC borrows funds from the financial markets to finance the acquisition or creation of assets which are then leased out to the Indian Railways or any entity under the Ministry of Railways. As of September 2023, promoters held 86.36 per cent stake in the 'Navratna' PSU.
(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)
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