IRFC Q3 results: Profit slips marginally to Rs 1,604 crore; stock settles 5% lower

Indian Railway Finance Corporation Ltd (IRFC) on Friday reported a slight dip in its third-quarter (Q3 FY24) profit. The rail PSU's net profit in December 2023 quarter came at Rs 1,604 crore, down 1.78 per cent from Rs Rs 1,633 crore in the year-ago period.

Revenue from operations, however, rose 8.43 per cent to Rs 6,742 crore in Q3 FY24 as against Rs 6,218 crore in the corresponding period last fiscal. The quarterly results were announced after market hours.

Earlier in the day, IRFC's stock slumped 5.12 per cent to settle at Rs 153.70. At this price, the stock has declined 20.28 per cent from its one-year high value of Rs 192.80, a level seen on January 23, 2024. Despite the mentioned drop, the multibagger scrip has rallied 503.93 per cent from its 52-week low price of Rs 25.45, hit on March 28 last year.

IRFC and a majority of other rail PSU stocks have witnessed a sharp rise in the past one year. The rally in railway counters could be attributed to the government's push for the sector. And, the said stocks are now undergoing some healthy profit-booking, an analyst said.

On technical setup, a series of support could be seen between Rs 140-135 levels. And, a decisive breach above an immediate resistance level of Rs 170 is required for further upside.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "IRFC has undergone some profit-booking after a dream run. A much-needed breather was required after the rally, and this should be seen as a healthy development in the bullish trend. At present, a series of support can be seen around the Rs 140-135 zone, while sacrosanct support lies around the Rs 120-115 zone. On the higher end, the bullish trend is likely to continue once it surpasses the resistance zone of Rs 170 in a decisive manner. Till then, it is advisable to have a pragmatic approach with bullish biases."

AR Ramachandran from Tips2trades said, "IRFC stock price looks bearish on daily charts with strong resistance at Rs 170. A daily close below support of Rs 151 could lead to 130 in the near term."

DRS Finvest founder Ravi Singh said, "The stock is currently looking weak. Those interested can buy around Rs 145-140 levels for a target price of Rs 185. Keep a strict stop loss placed at Rs 135."

The counter traded lower than the 5-day, 10-day and 20-day simple moving averages (SMAs) but higher than the 30-day, 50-, 100-, 150-day and 200-day SMAs. The scrip's 14-day relative strength index (RSI) came at 55.66. 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 18.91 against a price-to-book (P/B) value of 2.63. IRFC has a one-year beta of 1.1, indicating high volatility on the counter.

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 December 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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