IRFC shares hit record high, rise for third session; buy, sell or hold?

Shares of Indian Railway Finance Corporation Ltd (IRFC) zoomed to their all-time high amid a rally in the market today. IRFC stock gained 9.21% to a record high of Rs 38.29 against the previous close of Rs 35.06 on BSE. IRFC shares opened higher at Rs 35.60. Total 221.34 lakh shares of the firm changed hands amounting to a turnover of Rs 82.06 crore. The stock has gained 10% in the last three sessions. Market cap of IRFC rose to Rs 49,555 crore on BSE. The stock hit a 52-week low of Rs 20.45 on July 29, 2022.

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In terms of technicals, the relative strength index (RSI) of IRFC stands at 65.8, signaling it's trading neither in the overbought nor in the oversold zone. IRFC stock has a one-year beta of 0.8, indicating very low volatility during the period. IRFC stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

Here’s a look at what analysts said on the outlook of the stock.

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Aditya Gaggar, Director of Progressive Shares said, "From the technical perspective, Indian Railway Financial Corporation (IRFC) is facing a strong hurdle at Rs 37, a strong close above the same will be considered as a Cup and Handle Formation breakout, and as per the pattern, the target arrives at Rs 49. The leading indicator i.e. RSI has already given a breakout which is indicating that the price will follow the suit. Trend-following indicators such as ADX and MACD have already given a positive indication."

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Abhijeet from Tips2Trades said, "IRFC is bullish but also overbought on the Daily charts with next resistance at Rs 39.25. A daily close below support of Rs 35.3 could lead to Rs 32 in the near term."

Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "IRFC has seen good traction from the past couple of trading sessions, leading to a strong surge in the counter to clock new highs. On the technical front, the counter has seen a volume-based breakout around Rs 36 odd levels and is expected to continue the run in the comparable period. As far as levels are concerned, the zone of Rs 36-34 is likely to cushion any short-term blip, while sacrosanct support lies around the consolidation zone of the Rs 32-31 level. On the flip side, till the counter is able to sustain above the support zones, it is likely to trade with a positive bias and could continue its march in uncharted territory."

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Manoj Dalmia, CEO of Proficient Equities said, "Indian Railway Finance Corporation (IRFC) has tested the current level of Rs 36.75 multiple times and is trading above the resistance level. A return of 12% has been recorded over the past three months for the company as well as a new 52-week high has been seen. Investors can expect big moves once this level is crossed above 38. Investors can expect a medium to long-term target of Rs 50 and can accumulate at current levels."

IRFC reported a profit of Rs 6,337 crore for the financial year 2022-23. Revenue from operations for FY23 rose 17.70 per cent to Rs 23,891 crore as against Rs 20,298 crore reported a year ago. The earnings per share of the company were Rs 4.85 at the end of FY23 as compared with Rs 4.66 in the year-ago period.

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The board proposed a final dividend at 7 per cent of face value of Rs 10 each i.e. 70 paise per share for FY 2022-23.

For the March 2023 quarter, profit fell 10.9% to Rs 1,328 crore from Rs 1,492 crore a year ago. Consolidated revenue from operation climbed 5.14 per cent to Rs 6,236 crore for the March quarter as compared to Rs 5,931 crore in the year-ago period. The company is yet to announce its earnings for the June 2023 quarter.

Last week, state-owned RITES inked a memorandum of understanding (MoU) with IRFC to explore avenues of mutual collaboration in the railway eco-system and the transport infrastructure sector.

As part of the MoU, RITES will offer consultancy & advisory services and assist in ascertaining the financial & technical viability of projects, while IRFC will provide financial services to projects/ institutions that have got backward and or forward linkages with the Railways.

Indian Railway Finance Corp borrows funds from the financial markets to finance the acquisition/creation of assets which are then leased out to the Indian Railways or any entity under the Ministry of Railways.

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