IRFC Shares Climb 6%: What’s Next for This Rail PSU?
Shares of Indian Railway Finance Corporation (IRFC) surged 6.18% on Monday to touch a day high of ₹123.70, halting a two-session losing streak. The stock last traded at ₹123, up 5.58% for the day, though still down 18.16% year-to-date (YTD).
- The rebound aligns with a broad rally in domestic benchmarks, driven by positive geopolitical developments.
- A ceasefire announcement between India and Pakistan boosted overall market sentiment.
Mixed Q4 Performance and Fundraising Outlook
For the March 2025 quarter (Q4 FY25), IRFC reported a 2.1% decline in net profit, down to ₹1,682 crore from ₹1,717.3 crore in the same quarter last year. However, revenue grew 3.8% YoY, reaching ₹6,722 crore.
- Profit dip signals margin compression, possibly due to rising borrowing costs.
- Revenue increase reflects higher leasing activity and stable asset creation.
The company’s board approved a proposal to raise up to ₹60,000 crore for FY26, underscoring IRFC’s role in funding critical rail infrastructure.
- The fundraising will likely be used to support Indian Railways’ capex plans.
- This capital infusion could improve IRFC’s operational scale and revenue consistency.
Analyst Views Signal Short-Term Upside
Market experts remain optimistic about IRFC’s near-term price trajectory. Ravi Singh of Religare Broking sees a potential upside to ₹135, suggesting a stop-loss at ₹110.
- The recommendation reflects technical momentum and market support.
- Traders are advised to monitor support-resistance levels closely.
Kunal Kamble of Bonanza believes that if the stock stays above ₹109, it could rally towards ₹134–₹157.
- This outlook is based on price action and volume strength.
- Sustained momentum above key support could trigger a breakout rally.
Jigar S Patel from Anand Rathi pegged immediate support at ₹118 and resistance at ₹126. A breakout above ₹126 may open the path to ₹130, with the expected trading range being ₹115–₹130.
- The consolidation zone is narrowing, suggesting a potential breakout scenario.
- Investors should watch for volume confirmation before entering positions.
Technical Indicators and Valuation Metrics
Technically, IRFC is trading above its 5-day simple moving average (SMA) but remains below its 10-, 20-, 50-, 100-, and 200-day SMAs, indicating a mixed trend.
- A move above longer SMAs would confirm a sustainable recovery trend.
- The 14-day Relative Strength Index (RSI) is at 46.63, showing neutral momentum.
On the valuation front, IRFC has a price-to-earnings (P/E) ratio of 23.29 and a price-to-book (P/B) value of 2.96, with an earnings per share (EPS) of ₹5 and return on equity (RoE) of 12.70%.
- These figures suggest moderate valuation levels and steady profitability.
- The stock’s beta of 1.4 points to higher-than-average volatility, typical for PSU stocks.
Strategic Role and Government Holding
IRFC’s core function is to raise capital from the financial markets and lease assets to Indian Railways, enabling large-scale public infrastructure development.
- Its leasing model ensures predictable income streams, backed by sovereign support.
- The government owns 86.36% of IRFC, underlining its status as a Navratna PSU.
With Indian Railways planning large-scale modernization and electrification, IRFC remains a key financing partner, which could drive long-term earnings visibility.
Outlook Amid Market Tailwinds
IRFC’s price rebound coincides with broader market gains, as Indian equity benchmarks rallied over 3%, boosted by geopolitical optimism and improved investor sentiment.
- While the stock shows short-term bullish signals, a sustained uptrend depends on macro cues and interest rate movements.
- Medium-term investors should track IRFC’s fund deployment, profit margins, and capital structure efficiency for re-rating potential.
