⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
IRFC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | IRFC | Market Cap | 1,48,318 Cr. | Current Price | 114 ₹ | High / Low | 149 ₹ |
| Stock P/E | 21.2 | Book Value | 43.3 ₹ | Dividend Yield | 1.41 % | ROCE | 5.83 % |
| ROE | 12.8 % | Face Value | 10.0 ₹ | DMA 50 | 120 ₹ | DMA 200 | 126 ₹ |
| Chg in FII Hold | 0.01 % | Chg in DII Hold | 0.06 % | PAT Qtr | 1,802 Cr. | PAT Prev Qtr | 1,777 Cr. |
| RSI | 39.6 | MACD | -1.13 | Volume | 7,66,10,869 | Avg Vol 1Wk | 3,29,04,448 |
| Low price | 108 ₹ | High price | 149 ₹ | PEG Ratio | 9.58 | Debt to equity | 2.73 |
| 52w Index | 13.4 % | Qtr Profit Var | 10.5 % | EPS | 5.36 ₹ | Industry PE | 19.1 |
📊 Core Financials
- Revenue & Profitability: PAT improved from 1,777 Cr. to 1,802 Cr. QoQ (+10.5%), showing steady earnings growth.
- Margins: ROE at 12.8% is decent, while ROCE at 5.83% reflects modest efficiency.
- Debt: Debt-to-equity ratio of 2.73 is high, typical for a financing company, but manageable given government backing.
- Cash Flow: Dividend yield of 1.41% provides moderate shareholder reward.
💹 Valuation Indicators
- P/E Ratio: 21.2 vs Industry PE of 19.1 → slightly overvalued compared to peers.
- P/B Ratio: Current Price (114 ₹) / Book Value (43.3 ₹) ≈ 2.63, moderately expensive.
- PEG Ratio: 9.58 suggests valuation is stretched relative to growth prospects.
- Intrinsic Value: Current price near support (108 ₹) offers limited downside, but upside capped by high PEG.
🏦 Business Model & Competitive Advantage
- Indian Railway Finance Corporation (IRFC) operates as the financing arm of Indian Railways, funding rolling stock and infrastructure projects.
- Competitive advantage lies in government backing, monopoly-like status in railway financing, and predictable revenue streams.
- Overall health is stable, but profitability ratios remain modest and valuation multiples are stretched.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive entry between 108 ₹ – 115 ₹, near support levels.
- Long-Term Holding: Suitable for conservative investors seeking PSU stability and dividends, but growth prospects are limited.
✅ Positive
- Government backing ensures long-term stability.
- Consistent PAT growth (+10.5% QoQ).
- Dividend yield of 1.41% provides moderate income.
⚠️ Limitation
- High debt-to-equity ratio (2.73) reflects leverage risk.
- ROCE (5.83%) remains modest compared to peers.
- PEG ratio (9.58) indicates valuation mismatch with growth.
📉 Company Negative News
- FII holdings increased only marginally (+0.01%), showing limited foreign investor interest.
- Stock trading below DMA 50 (120 ₹) and DMA 200 (126 ₹) indicates technical weakness.
📈 Company Positive News
- DII holdings increased (+0.06%), reflecting domestic institutional support.
- PAT improved QoQ, showing consistent profitability.
🏭 Industry
- Industry PE at 19.1 is slightly lower than IRFC’s PE, highlighting mild overvaluation.
- Railway financing sector growth driven by government infrastructure spending.
- IRFC benefits from monopoly-like position in railway financing.
🔎 Conclusion
- IRFC offers stability with government backing and consistent earnings.
- Valuation is stretched relative to growth, but dividend yield provides some support.
- Best suited for long-term conservative investors entering near 108–115 ₹, with limited upside potential but strong stability.