IRFC shares jump 5% after Q4 earnings, dividend announcement; can stock revisit all-time highs?

Indian Railway Finance Corporation Ltd (IRFC) shares surged 5.08 per cent in Tuesday's trade to hit a high of Rs 182. The stock was last seen 3.95 per cent higher at Rs 180.05. At this price, it was down 6.61 per cent from its lifetime high of Rs 192.80, a level seen on earlier this year on January 23.

The rail PSU has reported a 34 per cent rise in its profit to Rs 1,717.3 crore for the March 2024 quarter (Q4 FY24) on account of higher income. It had clocked a profit of Rs 1,285.2 crore during the same period last year, the state-owned company said.

The company's total income rose to Rs 6,477.9 crore in the January-March quarter from Rs 6,230.2 crore in FY23. During the quarter under review, its expenses stood at Rs 4,760.6 crore as against Rs 4,945 crore a year ago.

In addition, the board of the company has approved a final dividend of 70 paise per share for financial year 2023-24 (FY24). The board of directors have also cleared resource raising of up to Rs 50,000 crore for FY25 from both domestic and international markets.

On technical setup, support on the counter could be seen at the Rs 160-170 zone. Two analysts suggested that the scrip has potential to revisit its record high levels.

"The stock has given a sloping trendline breakout. One can buy it for a target price of Rs 190 with a stop loss of Rs 166 for a short- to medium-term," Ratnesh Goyal, Head of Technical Analysis at Arihant Capital, told Business Today TV.

"Rs 160-162 levels should now provide a cushion to the counter. While on the higher end, the counter seems poised to reclaim its lifetime highs of Rs 190-192 from short- to medium-term view," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"IRFC is bullish but also overbought on daily charts with next resistance at Rs 193. Investors should keep booking profits as a daily close below support of Rs 170 could lead the stock to a lower level of Rs 146 in the near term," said AR Ramachandran from Tips2trades.

"The stock has recovered significantly from Rs 146 level. It has gained strength anticipating to retest the previous peak level of around Rs 193 in the coming days. Once a breakout above Rs 193 is confirmed, it would open the gates for next higher targets of Rs 216 and Rs 232 levels. The support now would be escalated to Rs 165 level," said Shiju Koothupalakkal - Technical Research Analyst at Prabhudas Lilladher.

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 March 2024, promoters held an 86.36 per cent stake in the 'Navratna' PSU.