IRCON - Investment Analysis

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

🚄 Investment Analysis: IRCON International Ltd. (IRCON)

Investment Rating: 3.5

🧮 Fundamental Snapshot

ROE (11.9%) and ROCE (12.1%) are moderate — not exceptional, but acceptable for a public infrastructure and engineering firm.

EPS of ₹7.73 and PAT of ₹211 Cr. look strong, though the quarter-on-quarter dip (-14.5%) should be watched for trend consistency.

Debt-to-equity of 0.68 shows a manageable capital structure, typical of infra businesses.

Dividend Yield of 1.71% offers some income cushion for long-term holders.

🔍 Valuation Insights

P/E of 23.4 matches the industry average (23.8) — fairly priced from a relative valuation perspective.

Book Value: ₹67.3 vs. Current Price: ₹181 implies a PB ratio ~2.7 — a little stretched for an infra-heavy business.

PEG Ratio: 3.36 is high, suggesting overvaluation relative to earnings growth, which is a caution sign.

📈 Technical & Sentiment Overview

RSI at 36.6 and MACD -4.15 indicate oversold territory and weak momentum — short-term bearish.

Trading below both 50-DMA & 200-DMA reflects consolidation or downtrend.

FII & DII holding slightly positive, but not strongly bullish.

Price is near recent lows (₹134) but far from 52-week high (₹302), implying a potential re-rating opportunity if fundamentals improve.

🎯 Ideal Entry Price Zone: ₹160 – ₹170 This range balances technical support zones with valuation safety, especially if RSI stays low and volume stabilizes.

🛡️ Holding or Exit Plan

📌 Hold Strategy

Time Horizon: 2–3 years

Hold if

ROCE rises above 15%

PEG ratio drops below 2.5 through earnings improvement

PAT stabilizes above ₹200 Cr. quarterly with consistent project execution

💼 Exit Strategy

Partial exit near ₹220–₹240 during bullish breakouts or major project wins

Full exit if

Price drops below ₹150 with RSI <30 and MACD accelerating downward

Debt levels spike or quarterly results continue declining

ROE slips below 9% consistently

IRCON sits in the middle of the pack for infra stocks — not a screaming buy, but decent for investors with modest return expectations and appetite for cyclical recovery. If you're hunting for something more aggressive or capital-light, I can bring in a comparison with Rail Vikas Nigam Ltd. or RITES for a sharper peer view. 🏗️📊 Let’s get strategic.

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