Shares of Indian Railway Finance Corporation (IRFC) Ltd recorded a sharp upward move in Wednesday's trade, in line with the positive trend in most rail counters. The stock jumped 5.87 per cent to hit a day high of Rs 166. It was last seen trading 4.56 per cent up at Rs 163.95. At this price, the scrip has gained 63.35 per cent on a year-to-date (YTD) basis. Despite the mentioned rise, IRFC has slipped 28.42 per cent from its record high value of Rs 229.05, a level seen on July 15, 2024.
The entire railway pack -- including IRFC -- was in a consolidation phase over the last three months. "Given the kind of earnings visibility and the Centre's focus towards the railway infrastructure, rail stocks are best positioned for long-term growth. That said, there could be a valuation froth in a few. So, one needs to be stock specific and only individual stock valuations should be considered," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
He added that there is a greater emphasis on the rail infra theme now, which is why these rail stocks are gaining momentum again.
On technical setup, support on the counter could be seen in the Rs 154-152 zone. Resistance may be found in the Rs 180-182 range.
Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "One can anticipate a further upward move in IRFC shares. The next near-term target will be Rs 178-180 levels. Immediate support will be maintained at Rs 152."
Ameya Ranadive, Senior Technical Analyst at StoxBox, said, "The stock is holding firmly above a rising trendline, indicating sustained bullish momentum. If it sustains above Rs 160, IRFC could move towards its immediate target range of Rs 179-182 in the short term. However, the view will be negated if the price falls below Rs 154, which serves as a critical support level."
The stock saw high trading volume on BSE today as around 34.38 lakh shares changed hands at the time of writing this story. The figure was higher than the two-week average volume of 22.42 lakh shares. Turnover on the counter came at Rs 56 crore, commanding a market capitalisation (m-cap) of Rs 2,14,192.81 crore.
As per BSE, the stock has a price-to-equity (P/E) ratio of 31.47 against a price-to-book (P/B) value of 3.98. Earnings per share (EPS) stood at 4.98 with a return on equity (RoE) of 12.65.
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 2024, the government held an 86.36 per cent stake in the 'Navratna' PSU.