IRFC shares zoom over 430% in a year; is more steam left?

Shares of Indian Railway Finance Corporation Ltd (IRFC) extended their gains for the third straight session in Thursday's trade. The stock jumped 4.63 per cent to hit a day high of Rs 161.50. The multibagger scrip has rallied more than 430 per cent in the past one year.

On BSE, around 87.89 lakh shares were last seen changing hands today. The figure was lower than the two-week average volume of 1.39 crore shares. Turnover on the counter came at Rs 139.86 crore, commanding a market capitalisation (m-cap) of Rs 2,07,005.14 crore.

The counter was trading higher than the 5-day, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 10-day and 20-day SMAs.

The stock's 14-day relative strength index (RSI) came at 56.20. 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 33.41 against a price-to-book (P/B) value of 4.23.

In December 2023-24 (Q3 FY24) quarter, the rail PSU's net profit fell 1.78 per cent to Rs 1,604 crore from Rs Rs 1,633 crore in the year-ago period.

Revenue from operations, however, rose 8.43 per cent to Rs 6,742 crore in Q3 FY24 as against Rs 6,218 crore in the corresponding period last fiscal.

Analysts largely gave mixed views on the counter. One said the stock looked expensive while the other suggested that a decisive breach above Rs 162 level may trigger more upside.

"IRFC stock looked very expensive. It has already corrected but still the valuation is not cheap for somebody to enter. So, one has to be cautious," AK Prabhakar, Head of Capital at IDBI Capital told Business Today TV.

From current levels, it needs to decisively breach the Rs 162 zone to improve the bias, 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 December 2023, promoters held 86.36 per cent stake in the 'Navratna' PSU.

(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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