IRFC shares slip 10% after hitting record high; here's what investors can do

Shares of Indian Railway Finance Corporation Ltd (IRFC) cooled off from their all-time high levels in Tuesday's trade. The stock today jumped 5.39 per cent to hit a lifetime high of Rs 213 during the initial session. Later, it fell 9.81 per cent from the said record high level to hit a day low of Rs 192.10. The scrip was last seen trading 2.42 per cent down at Rs 197.20 from yesterday's closing price of Rs 202.10. At this price, it has ascended by 498.30 per cent in the past one year.

The stock today recorded high trading volume and heavy turnover on BSE. Around 1.92 crore shares were last seen changing hands. The figure was way more than the two-week average volume of 68.48 lakh shares.

Turnover on the counter came at Rs 388.34 crore, commanding a market capitalisation (m-cap) of Rs 2,58,952.45 crore. There were 42,99,423 sell orders against buy orders of 7,96,656 shares.

A few analysts largely remained positive on this rail PSU's counter ahead of the Budget presentation on July 23. Railway stocks are in the momentum now ahead of Budget, anticipating infrastructure development, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"IRFC has been going up in the recent past, scaling its all-time high levels. Investors with a longer-term horizon can add this stock. Given the kind of earnings visibility, the stock still looked attractive. One can add this stock for a moderate expectation of 10-15 per cent range from the current range," Bathini added.

"The stock has seen a strong spurt in the last two sessions to register record highs. The counter is poised to continue its up move with some in-between hiccups," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Technically, the Rs 190-188 range is likely to provide cushion, while sacrosanct support lies around the Rs 175-170-odd zone. On the higher end, Rs 210-212 seems the intermediate hurdle," Krishan stated.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 68.53. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 41.09 against a price-to-book (P/B) value of 5.37. Earnings per share (EPS) stood at 4.92 with a return on equity of 13.07.

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.