IRFC shares surge 7% today; how strong is this fresh upside?

Indian Railway Finance Corporation Ltd (IRFC) shares rose sharply in Tuesday's trade. The stock jumped 7.02 per cent to hit a day high of Rs 156.20. It has gained around 55 per cent on a year-to-date (YTD) basis. The rail PSU is scheduled to release its fourth-quarter (Q4 FY24) earnings next week on Monday (May 20).

The counter saw high trading volume on BSE as 51.80 lakh shares were last seen changing hands on BSE. The figure was higher than the two-week average volume of 41.90 lakh shares. Turnover on the counter came at Rs 79.11 crore, commanding a market capitalisation (m-cap) of Rs 2,02,300.47 crore.

On technical setup, support on the counter could be seen at the Rs 142-140 zone. And, a decisive breach above the Rs 160-162 region is required for further upside.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "IRFC sustains the cycle of higher highs – higher lows on a slender time zone and is hovering just above its short term moving average on daily charts, indicating inherent strength. A recent low of the Rs 142-140 zone is likely to cushion any blip, followed by sacrosanct support of Rs 134. On the higher end, the next potent resistance is seen around the Rs 160-162 zone and a decisive closure above the same can only trigger fresh additions."

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked strong on daily charts. It can hit an upside target of Rs 162 in the near term. Keep stop loss placed at Rs 150."

AR Ramachandran from Tips2trades said, "IRFC stock price looks bullish on daily charts with strong support at Rs 142.45. A daily close above resistance of Rs 158.2 could lead it to an upside target of Rs 180 in the near term."

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.