31 Jul IRFC Shares at All-Time High – What Next?

IRFC @ 52 Week High: Buy, Sell, Hold: What Analysts Say?

IRFC, an important player in India’s infrastructure development, has seen its stock price rise to a record high of Rs 38.55. This marks a significant 9.21% increase from its previous close.

The company’s market cap has also reached an impressive Rs 49,555 crore.

Technical Indicators Explained:

Don’t worry if technical jargon sounds confusing.

The relative strength index (RSI) of 65.8 indicates that the stock is neither too high nor too low, which is a good sign for potential investors.

The beta of 0.8 suggests that the stock’s volatility has been low in the past.

Plus, IRFC’s stock is trading above its 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day moving averages, signaling a positive trend.

Also Read: Buy or Sell: Sumeet Bagadia’s 3 Stock Recommendations for This Week
 

What Analysts Say:

Experts are optimistic about IRFC’s future:

Aditya Gaggar from Progressive Shares believes that a strong close above Rs 37 could trigger a “Cup and Handle Formation” breakout, with a target of Rs 49.

Abhijeet from Tips2Trades points out that while IRFC is bullish, it is also overbought on the Daily charts. A daily close below Rs 35.3 might lead to a short-term decline.

Osho Krishan from Angel One sees IRFC’s breakout as a positive sign, expecting it to continue its upward trend as long as it remains above the support zones.

Manoj Dalmia, CEO of Proficient Equities, suggests a medium to long-term target of Rs 50 for IRFC shares.

Also Read:“Stocks with dividends up to Rs. 150”

Source: Company Presentation
 

IRFC: A Leading Infrastructure Financing Company

 
IRFC (Indian Railway Finance Corporation) plays a crucial role in India’s infrastructure development, especially in the railway sector. As the financing arm of Indian Railways, IRFC raises funds from the capital market to finance various railway projects, including rolling stock (wagons and coaches) and railway infrastructure assets.

For a comprehensive understanding of the IRFC, its business, and its products, you can check this

Related read: IRFC: Next to hit Life Time High?
 

Strong Capitalization and Asset Quality:

IRFC boasts a robust capital base, with a net worth of Rs 45,470 crore as of March 2023. Regular equity capital infusions by GoI ensure a healthy gearing ratio of 9.21 times and zero non-performing assets (NPAs) due to its lending primarily to a sovereign entity like IR.

Adequate Resource Profile:

One of IRFC’s strengths lies in its ability to access a diverse pool of wholesale investors,

-banks,
-mutual funds,
-pension and gratuity funds,
-insurance companies, and
-external commercial borrowings (ECBs).

This ability to raise long-term funds at competitive rates helps IRFC meet its financing requirements efficiently.

Earnings Profile:

It is essential to consider IRFC’s earnings profile, which is influenced by its cost-plus-based model as per the standard lease agreement with the Ministry of Railways.

While this approach ensures stability, it may limit the earning potential compared to other infrastructure financing companies.

Liquidity:

IRFC maintains sufficient liquidity with Rs 401 crore cash and liquid investments, along with unutilized bank lines of Rs 17,471 crore as of May 2023, against debt obligations of Rs 14,656 crore until September 2023.

This liquidity position provides the company with the flexibility to meet its financial commitments.

Recent MoU with RITES:

A noteworthy development for IRFC is the Memorandum of Understanding (MoU) signed with RITES, signaling the company’s commitment to enhance collaboration and diversify its lending beyond Indian Railways.
The deal will provide IRFC with valuable advisory and consultancy services, improving the assessment of technical and financial viability for its projects.

Deal Impact:

The collaboration with RITES opens doors for IRFC to explore new avenues and diversify its lending beyond Indian Railways. The deal is expected to provide IRFC with valuable advisory and consultancy services, improving the assessment of technical and financial viability for its projects.

Financials:

For the financial year 2022-23, IRFC reported a profit of Rs 6,337 crore on total income (net of interest expenditure) of Rs 23,891 crore, marking a 17.7% increase in revenue from the previous year.

The earnings per share (EPS) stood at Rs 4.85 at the end of FY23 as compared to Rs 4.66 in the year-ago period.

The company’s capitalization remains strong, with a net worth of Rs 45,470 crore.

Source : Screener
 

Specific Risks Involved in Investing in IRFC Shares

 
Minimum Shareholding Risk in IRFC: