IFCI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of IFCI Ltd, with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and incorporated recent performance insights from September 2025

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📊 Fundamental Analysis of IFCI Ltd

🔍 Core Financials

Profitability

PAT Qtr: ₹7.38 Cr vs ₹273 Cr — sharp decline, indicating volatility or one-off adjustments.

EPS: ₹0.73 — very low, not aligned with current valuation.

ROE: 2.97%, ROCE: 14.9% — weak shareholder returns, but decent operational efficiency.

Leverage & Liquidity

Debt-to-equity: 2.18 — moderately high, typical for NBFCs; manageable but worth monitoring.

Dividend Yield: 0.00% — no payouts, reinvestment-focused.

Cash Flow & Stability

Quarterly profit variation: ↑105% — high volatility.

Long-term returns: 3-year CAGR of 419.6%, 5-year CAGR of 736.8% — impressive compounding

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 80.0 Extremely overvalued vs industry PE of 25.3

P/B Ratio ~9.2 Very high — not justified by book value or ROE

PEG Ratio 3.02 Elevated — growth not justifying price

Intrinsic Value ~₹45–₹50 Below current price — limited upside

🏢 Business Model & Competitive Edge

Segment Focus: Long-term project financing across infrastructure, manufacturing, and services.

Moat: Legacy institution with government backing and strategic exposure to mega projects like Adani Mundra Port, GMR Goa Airport, and NRSS Transmission

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Growth Drivers

NBFC sector tailwinds and infra push.

Technical momentum: trading above all major moving averages

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Historical revenue growth: 133.4% quarterly, with 6.8% profit margin

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📈 Technical & Entry Guidance

Current Price: ₹59.2

DMA 50/200: ₹55.7 / ₹55.2 — trading above both, indicating bullish momentum.

RSI: 68.1 — nearing overbought zone.

MACD: 0.45 — positive crossover.

🎯 Entry Zone

Ideal Buy Range: ₹52–₹56 — near DMA support.

Stop Loss: ₹48

Target: ₹70–₹75 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong historical returns and infra exposure support long-term potential.

Buy on dips: Preferably near ₹55 zone.

Growth Triggers: Infra financing expansion, strategic partnerships, and PSU reforms.

⭐ Fundamental Rating

3.6

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