IRFC shares extend fall, dive 11% today; here's what analysts say

Shares of Indian Railway Finance Corporation Ltd (IRFC) extended their fall for the third straight session in Monday's trade. The stock tanked 11.26 per cent to hit a day low of Rs 136.40. Despite the mentioned drop, the multibagger scrip has rallied more than 360 per cent in the past one year.

The rail PSU's net profit in December 2023-24 (Q3 FY24) 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.

An analyst suggested that IRFC's stock still "looked expensive" in spite of the correction. "IRFC stock looked very expensive. It has already corrected but still the valuation is not cheap for somebody to enter. So, one has to be cautious," AK Prabhakar, Head of Capital at IDBI Capital told Business Today TV.

On technical setup, support could be seen around the Rs 130 zone. Resistance may be found at Rs 153.7, followed by Rs 162 level.

"The stock after witnessing a decent surge has resisted near the Rs 192 zone and with profit booking seen has retraced 50 per cent of the current rally. Next crucial and major support will be at Rs 130. From current levels, it needs to decisively breach the Rs 162 zone to improve the bias," Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.

"IRFC stock price looks bearish on daily charts with strong resistance at Rs 153.7. A daily close below support of Rs 133 could lead to Rs 117 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 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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