IRFC shares zoom 487% from 52-week low, overbought on charts; more steam left?

Shares of Indian Railway Finance Corporation Ltd (IRFC), the financial arm of the Indian Railways, have surged 487% from their 52-week low hit last year. The IRFC stock, which fell to a 52 week low of Rs 25.45 on March 28, 2023 rose to a record high of Rs 149.35 today, clocking 487% returns during the period. With the railway stock rising nearly 50% in the last seven days, it is now strongly overbought on technical charts as the relative strength index (RSI) of IRFC stands at 91.3. In the current session, the IRFC stock gained 5.34% to Rs 149.35.

Market cap of the firm rose to Rs 1.92 lakh crore. Total 217.55 lakh shares of the firm changed hands amounting to the highest turnover of Rs 314.26 crore on BSE.

The IRFC stock has zoomed 360.84% in the last one year. In the current year, the stock has rallied 46.66%. The IRFC stock has a PE of 30.53, which indicates it’s overvalued compared to the sector. The sectoral PE stands at 15.23.

IRFC stock has a one-year beta of 1, indicating average 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.

"With Budget around the corner, railways stocks have been witnessing sharp gains. It could be due to anticipation of a record budgetary allocation for the sector," said Vishal Periwal, Sector Analyst (Infra) at IDBI Capital.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One said, "IRFC witnessed a strong spurt and continued its northward march into uncharted territory. The stock seems poised to carry momentum further. A series of support can be seen in the Rs 120-115 zone while sacrosanct support lies around Rs 105-100 zone. As the counter is in an uncharted zone with no specific technical resistance, it is advisable to keep trailing profits regularly."

"IRFC is bullish but also overbought on daily charts. Investors should book profits at current levels as a daily close below support of Rs Rs 120 could lead to target of Rs 99 in the near term," said Abhijeet from Tips2trades.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher said, "The stock has witnessed a decent spurt. With the bias maintained strong, we expect further upward move for next targets of Rs 148-164. From current levels, the support would be at the Rs 125 zone and only a decisive breach below Rs 114 level shall weaken the trend overall."

IRFC logged 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.

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.

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.

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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