IFCI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.6
| Stock Code | IFCI | Market Cap | 15,813 Cr. | Current Price | 58.7 ₹ | High / Low | 74.5 ₹ |
| Stock P/E | 306 | Book Value | 6.63 ₹ | Dividend Yield | 0.00 % | ROCE | 8.48 % |
| ROE | 2.94 % | Face Value | 10.0 ₹ | DMA 50 | 57.1 ₹ | DMA 200 | 55.7 ₹ |
| Chg in FII Hold | 0.07 % | Chg in DII Hold | 0.02 % | PAT Qtr | 21.4 Cr. | PAT Prev Qtr | 6.85 Cr. |
| RSI | 52.5 | MACD | 1.25 | Volume | 1,18,93,472 | Avg Vol 1Wk | 1,69,54,731 |
| Low price | 38.1 ₹ | High price | 74.5 ₹ | PEG Ratio | 10.3 | Debt to equity | 2.01 |
| 52w Index | 56.5 % | Qtr Profit Var | -92.2 % | EPS | 0.19 ₹ | Industry PE | 19.8 |
Core Financials:
IFCI’s fundamentals are weak. ROE is only 2.94% and ROCE 8.48%, reflecting poor efficiency. EPS is extremely low at ₹0.19, and quarterly profit variation is highly negative (-92.2%), showing earnings instability. Debt-to-equity at 2.01 is moderate but still a concern.
Valuation:
Stock P/E of 306 is extremely high compared to industry average (19.8), indicating severe overvaluation. PEG ratio of 10.3 further highlights unsustainable growth expectations. Price-to-book is ~8.85, far above peers, making intrinsic value unattractive. Dividend yield is nil (0.00%).
Business Model & Health:
IFCI operates as a financial institution with exposure to lending and investment activities. Despite government-linked support, profitability metrics remain weak, and the business model lacks competitive strength compared to peers.
Entry Zone:
Ideal entry zone: ₹40–₹50. Current price ₹58.7 is above fair value. Long-term holding is risky unless earnings stabilize and valuation normalizes.
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Positive
- Recent PAT recovery (₹21.4 Cr vs ₹6.85 Cr)
- Marginal increase in FII (+0.07%) and DII (+0.02%) holdings
- Technicals show mild support: RSI 52.5, positive MACD (1.25)
- Trading momentum supported by high volumes
Limitation
- Extremely high P/E (306) vs industry (19.8)
- Weak ROE (2.94%) and low EPS (₹0.19)
- PEG ratio (10.3) indicates overvaluation
- Profit volatility undermines investor confidence
- No dividend yield
Company Negative News
- Sharp quarterly profit contraction (-92.2%)
- Overvaluation concerns with inflated P/E and P/B ratios
Company Positive News
- PAT recovery in latest quarter
- Slight positive momentum in institutional holdings
- Technical indicators show mild bullishness
Industry
Financial services sector trades at industry P/E of 19.8, supported by credit demand and government initiatives. Peer institutions show stronger ROE and profitability, highlighting IFCI’s relative weakness.
Conclusion
IFCI is highly overvalued with weak fundamentals. Rating: 2.6. Entry near ₹40–₹50 is preferable for speculative investors. Long-term holding is risky unless profitability improves. Exit strategy around ₹70–₹74 if fundamentals stagnate.
Would you like me to also generate a peer benchmarking HTML table comparing IFCI with IDBI and IDFC First Bank, so you can see relative valuation and efficiency side by side?