For the third day in a row Indian Railway Finance Corporation Ltd (IRFC) stock experienced a large increase during trading on Tuesday. The stock climbed 9.08% higher than its previous finish of Rs. 38.23 to an all-time high of Rs. 41.70. With almost 2.52 crore shares touching hands on the BSE, the trading volume was astounding and greatly exceeded the two-week average volume of 86.02 lakh shares. The total turnover on the counter amounted to Rs 101.61 crore, contributing to a market capitalization (m-cap) of Rs 53,789.97 crore.
MoU with RITES for Mutual Collaboration:
One notable recent development is the signing of a memorandum of understanding (MoU) between IRFC and state-owned RITES. The purpose of this MoU is to explore collaborative opportunities in the railway ecosystem and the transport infrastructure sector. As part of this partnership, RITES will offer consultancy and advisory services, aiding in the assessment of financial and technical viability for projects. Meanwhile, IRFC will provide financial services to projects and institutions that have backward or forward linkages with the Railways.
Analysts Views on IRFC's Potential
Several analysts have weighed in on the potential of IRFC’s stock. Osho Krishan, Senior Analyst for Technical & Derivative Research at Angel One, believes that the stock has gained strong momentum in recent trading sessions and is likely to continue its upward trajectory for the foreseeable future. He identifies the support zones at Rs 36-34, which could cushion short-term fluctuations, while the critical support lies around the consolidation zone of Rs 32-31. As long as the counter remains above these support levels, it is expected to trade positively and chart new territories.
Medium to Long-term Target of Rs 50:
Manoj Dalmia, CEO of Proficient Equities, recommends a medium to long-term target of Rs 50 for investors, suggesting that the current levels are suitable for accumulation.
Caution on Overbought Condition:
On the other hand, AR Ramachandran from Tips2trades warns that while IRFC appears bullish, it is also overbought based on daily charts.
Target Price and Technical Charts:
Aditya Gaggar, Director of Progressive Shares, cites technical charts and sets a target price of Rs 49.
Technical Indicators and Financial Ratios:
The relative strength index (RSI) for the company as of today is 85.63.RSI values above or below 30 indicate overbought or oversold conditions, respectively. The stock’s price-to-earnings (P/E) and price-to-book (P/B) ratios are 7.88 and 1.10, respectively.
Average Target Price and Volatility:
According to Trendlyne data, the average target price for the scrip is Rs 32, suggesting a potential downside of just 21%. The one-year beta of 0.84 indicates relatively low volatility.
IRFC's Core Function:
It’s important to understand IRFC’s core function, which involves borrowing funds from financial markets to finance the acquisition or creation of assets. These assets are then leased out to the Indian Railways or entities under the Ministry of Railways.
Conclusion:
In conclusion, IRFC’s shares have experienced significant growth, and analysts hold differing opinions on its future trajectory. While some believe it can hit the Rs 50 level, others caution about potential overbought conditions. As with any investment decision, investors should conduct thorough research and consider their risk tolerance before making any moves in the stock market.
FAQ's
In the recent trading session, IRFC shares surged by 9.08%, reaching a record high of Rs 41.70. This increase represents a notable gain over the previous closing price of Rs 38.23.
Yes, there was a remarkable trading volume for IRFC shares in the recent session. Around 2.52 crore shares were traded on the BSE, significantly higher than the two-week average volume of 86.02 lakh shares.
As per the recent share price, IRFC’s market capitalization (m-cap) stands at Rs 53,789.97 crore.
IRFC’s stock has a price-to-earnings (P/E) ratio of 7.88, which reflects the company’s earnings relative to its share price.