IFCI - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 2.8

🧾 Core Financial Analysis

📉 Profitability & Growth

PAT Qtr: ₹228 Cr vs ₹–8.74 Cr — strong turnaround, but volatile earnings history.

EPS: ₹0.63 — extremely low for a ₹59 stock.

ROE (2.60%) & ROCE (8.08%) — weak return metrics, indicating poor capital efficiency.

💰 Cash Flow & Debt

Debt-to-Equity: 0.43 — moderate leverage, manageable.

Dividend Yield: 0.00% — no income generation for shareholders.

Cash Flow: Likely unstable due to inconsistent profitability and legacy issues.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 92.5 Extremely overvalued vs industry PE of 24.6

P/B Ratio ~1.83 Reasonable, but not justified by weak ROE

PEG Ratio 3.30 High — growth not supporting valuation

Intrinsic Value Estimated ~₹35–₹40 Based on earnings and sector benchmarks

🏢 Business Model & Competitive Advantage

Sector: Financial services — IFCI Ltd is a government-backed development finance institution.

Model: Lending to infrastructure and industrial projects, with a legacy-heavy portfolio.

Moat: Historical relevance, but limited competitive edge in current market.

Growth Drivers: Potential restructuring, asset monetization, and government support.

Risks: Poor asset quality, inconsistent earnings, and limited scalability.

📉 Technical & Sentiment Indicators

RSI: 42.5 — neutral zone, no strong momentum.

MACD: -0.56 — bearish signal.

DMA 50 & 200: Price hovering near both — sideways trend.

Volume: Above average — speculative interest, but not backed by fundamentals.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹38–₹45 — closer to intrinsic value and technical support.

Avoid fresh entry at current levels unless earnings stabilize and valuation corrects.

📈 Long-Term Holding View

High-risk speculative hold.

Turnaround potential exists, but fundamentals are weak and valuation is excessive.

Suitable only for investors with high risk appetite and short-term trading intent.

Long-term holding not advisable without clear signs of sustainable profitability.

Would you like a comparison with REC or PFC to explore more stable government-backed finance plays?

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