IRB - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.5
| Stock Code | IRB | Market Cap | 25,388 Cr. | Current Price | 42.0 ₹ | High / Low | 55.2 ₹ |
| Stock P/E | 28.1 | Book Value | 25.2 ₹ | Dividend Yield | 0.71 % | ROCE | 7.21 % |
| ROE | 8.13 % | Face Value | 1.00 ₹ | DMA 50 | 41.7 ₹ | DMA 200 | 44.8 ₹ |
| Chg in FII Hold | -0.08 % | Chg in DII Hold | 0.39 % | PAT Qtr | 188 Cr. | PAT Prev Qtr | 140 Cr. |
| RSI | 55.1 | MACD | -0.14 | Volume | 57,90,074 | Avg Vol 1Wk | 85,79,413 |
| Low price | 38.6 ₹ | High price | 55.2 ₹ | PEG Ratio | 0.61 | Debt to equity | 0.78 |
| 52w Index | 20.9 % | Qtr Profit Var | 17.8 % | EPS | 9.34 ₹ | Industry PE | 17.4 |
📊 IRB shows moderate potential for long-term investment. ROE at 8.13% and ROCE at 7.21% are average, reflecting limited efficiency. The PEG ratio of 0.61 suggests fair valuation relative to growth, while debt-to-equity at 0.78 indicates manageable leverage. However, the stock trades at a P/E of 28.1, well above the industry average of 17.4, pointing to overvaluation. Current price (42.0 ₹) is near DMA 50 (41.7 ₹) and slightly below DMA 200 (44.8 ₹), showing consolidation. Dividend yield at 0.71% provides minor income support.
💡 Ideal Entry Zone: 40 ₹ – 42 ₹ (aligned with DMA 50 support and valuation comfort).
📈 Exit / Holding Strategy: If already holding, maintain for 2–3 years provided ROE improves above 10% and earnings growth sustains. Consider partial profit booking near 50–55 ₹ resistance. Long-term holding should be cautious given high P/E and moderate efficiency metrics.
Positive
- 📌 PEG ratio of 0.61 indicates fair valuation relative to growth.
- 📌 Debt-to-equity ratio of 0.78 shows manageable leverage.
- 📌 Quarterly PAT growth of 17.8% (140 Cr. to 188 Cr.).
- 📌 EPS at 9.34 ₹ supports earnings visibility.
Limitation
- ⚠️ ROE at 8.13% and ROCE at 7.21% are modest.
- ⚠️ P/E of 28.1 vs industry PE of 17.4 highlights overvaluation.
- ⚠️ Dividend yield at 0.71% is low.
- ⚠️ RSI at 55.1 indicates neutral momentum, limited upside.
Company Negative News
- ❌ Slight decline in FII holdings (-0.08%).
- ❌ Valuation multiples remain stretched compared to peers.
Company Positive News
- ✅ Quarterly PAT improved from 140 Cr. to 188 Cr.
- ✅ DII holdings increased (+0.39%), showing domestic confidence.
Industry
- 🏗️ Industry PE at 17.4 vs stock PE 28.1 highlights premium valuation.
- 🏗️ Infrastructure sector growth supported by government spending and road development projects.
Conclusion
🔎 IRB offers moderate fundamentals with fair valuation on PEG but stretched P/E compared to industry. Best suited for cautious investors who can accumulate near 40–42 ₹ and hold for 2–3 years, while monitoring ROE improvement and earnings growth. Profit booking near 50–55 ₹ resistance is advisable.