On August 5, IRFC emerged as a top pick for investors, with analysts projecting a target price exceeding Rs 200. Currently priced just above Rs 190, the stock is anticipated to rise by nearly 8% within the week. As the largest railway stock in India, IRFC boasts a market capitalization of over Rs 2.51 lakh crore and has seen a remarkable year-to-date increase of over 21%.
Despite the positive outlook for IRFC, the broader stock market is expected to show sideways movement with a bearish sentiment due to weak global cues. Concerns regarding a potential recession in the US, following unemployment claims that surpassed the Federal Reserve’s limits, are contributing to panic selling in the Asian markets. Last week, Wall Street also experienced a significant decline.
Analyst Recommendations
Shiju Koothupalakkal, a technical analyst at Prabhudas Lilladher, has recommended buying IRFC shares with a target price of Rs 207 and a stop-loss set at Rs 187. According to Trendlyne data, the consensus recommendation from two analysts for IRFC is a “BUY.”
Key Fundamentals:
- Annual Revenue: Increased by 11.38% in the last year, reaching ₹26,655.92 crore, compared to the sector’s average growth of 27.24%.
- Annual Net Profit: Rose by 1.18% to ₹6,412.1 crore, with the sector average net profit growth at 26.77%.
- Stock Performance: Over the past year, the stock price has surged by 326.93%, outperforming its sector by 268.01%.
- Debt-to-Equity Ratio: Stands at 8.38, indicating high leverage as company assets are financed through debt.
- Mutual Fund Holding: Increased by 0.37% in the last quarter, now at 0.55%.
- Interest Coverage Ratio: Currently at 1.32, which is within the normal range of 1 to 1.5.
- Price to Earnings Ratio: 39.1, which is higher than the sector average of 21.69.
- Return on Equity (ROE): 13.03%, which is considered healthy.
- Promoter Shareholding: Remained stable at 86.36%, with no promoter pledges.
IRFC was established on December 12, 1986, as the dedicated financing arm of the Indian Railways, mobilizing funds from domestic and international capital markets. As of last Friday, the stock price was recorded at Rs 192.30, up by 1.32%, with a market cap of Rs 2,51,307.37 crore and a weekly performance increase of 3.5%.
In addition to IRFC, Koothupalakkal has also recommended buying two other stocks:
- Ramkrishna Forgings: Current Market Price (CMP) 887, Stop Loss 870, Target 932
- West Coast Paper: CMP 630.75, Stop Loss 615, Target 664
Disclaimer: This summary is for informational purposes only and does not constitute financial advice. Investment in stocks involves risks, and past performance is not indicative of future results. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. The views expressed by analysts may vary, and the market conditions can change rapidly. The information provided herein is based on publicly available data as of the date mentioned and may not reflect the most current market developments.
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