IRCON - Fundamental Analysis

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

Fundamental Rating: 3.6

📊 Core Financials Overview

Profitability

ROE of 11.9% and ROCE of 12.1% are modest — not exceptional, but stable.

EPS of ₹7.73 aligns with its P/E, suggesting fair earnings relative to price.

Quarterly PAT dropped by 14.5%, which raises concerns about earnings consistency.

Leverage

Debt-to-equity ratio of 0.68 is manageable, though higher than ideal for a PSU engineering firm.

Dividend yield of 1.71% adds income appeal for long-term holders.

Cash Flow

Not explicitly stated, but IRCON’s government contracts typically ensure steady receivables, albeit with delays.

📉 Valuation Metrics

Metric Value Interpretation

P/E Ratio 23.4 Fairly valued vs. industry average (23.8)

P/B Ratio ~2.69 Slightly expensive on book value basis

PEG Ratio 3.36 High — suggests overvaluation relative to growth

Intrinsic Value Likely below current price due to weak growth and high PEG

🏗️ Business Model & Competitive Edge

Sector: Rail infrastructure and engineering — IRCON is a PSU with strong government backing.

Moat: Long-term contracts, sovereign support, and execution track record.

Risks: Bureaucratic delays, margin pressure, and limited scalability compared to private peers.

Ownership Trends

FII holding increased (+0.47%) — positive sentiment.

DII holding stable — neutral.

📉 Technical & Sentiment Indicators

RSI at 36.6 — approaching oversold zone.

MACD negative and price below both 50-DMA and 200-DMA — bearish trend.

Volume spike suggests accumulation interest near support.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹160–₹170 range (near RSI support and below DMA levels)

Long-Term View

Suitable for conservative investors seeking dividend income and PSU stability.

Not a high-growth play — better for capital preservation and modest returns.

Watch for margin improvement and order book expansion.

Would you like a dividend-focused comparison with other PSU infra stocks like RITES or RVNL?

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