The Indian Railway Finance Corporation (IRFC) is a government-owned organization that funds railway projects in India. It plays a crucial role in developing and expanding the country’s vast railway network, supporting new trains, and upgrading railway stations.
IRFC provides the necessary funds to keep these projects running smoothly and on track.
Let’s discuss the Indian Railway Finance Corporation (IRFC) stock price target for the year 2023 to 2025 to help you make an informed decision.
IRFC Share Price Target for 2025
IRFC share is currently trading at around Rs 45 share price. Stock market experts believe that IRFC’s stock has the potential for moderate growth over the next few years.
I. IRFC Share Price Target for 2023
According to experts at Choice Broking, the share is in a positive trend. It can cross Rs 50 within this month.
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II. IRFC Share Price Target for 2024
If new projects are launched which are expected to launch within 2023 (we’ll discuss them in the next section), then IRFC stock price is expected to rise further between the 60-70 price range in 2024.
III. IRFC Share Price Target for 2025
You can expect the IRFC share target price to reach Rs 80-90 by 2025 as the corporation has multiple projects in its pocket and its profitability is likely to increase in the future as per some business analysts.
You can also read our analysis of the LIC share price target for 2025, another government-backed entity that can be a safer bet for you.
IRFC’s Business Prospects
As India continues to invest in its railway infrastructure, there’s a high probability that IRFC will remain in the spotlight.
According to Times of India, Indian Railways is looking to float a massive tender worth Rs 25,000 crore to get their hands on 60,000 wagons during the July to September 2023 quarter.
Now, this tender is also good for several other companies like RVNL. Because these companies are set to benefit from the lucrative Rs 25,000 crore tender as they supply various equipment and designs for Indian Railways’ wagons.
But these railway PSUs like RVNL need some financial backing to meet their respective order books. And that’s where IRFC comes into play. With its line of credit, IRFC is ready to step up and provide much-needed finance to these companies.
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Fundamental Analysis of IRFC
IRFC’s revenue has shown consistent growth at 21% per annum and profit growth is also good at 26% in the last 3 years. Let’s discuss IRFC’s fundamentals for a better understanding.
#1. Revenue Growth
Over the last three years, IRFC’s revenue has shown a consistent upward trend, and the quarterly revenue of IRFC has grown by 95% (almost double) in just 3 years.
For example, in March 2020 the revenue of IRFC was Rs 3206 crores which has now reached Rs 6236 crores in March 2023.
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#2. Profit Growth: IRFC has shown tremendous growth in its net profits that has risen almost 2x since March 2020.
| Year | Net Profit (in crores) |
| 2019-20 | 3,192 |
| 2020-21 | 4,416 |
| 2021-22 | 6,090 |
| 2022-23 | 6,337 |
IRFC’s EPS has also shown an upward trend which is now doubled to 1.02 in 2023 from 0.55 in 2020, indicating that the company is becoming more profitable.
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#3. Loan Distribution: IRFC’s loan distribution is highly concentrated on the Ministry of Railways (MoR) because 100% of the loan is given to Railway projects only. The three clients of IRFC are –
- Ministry of Railways
- Railway infrastructure assets
- Railway PSUs
Since it is a Govt-backed corporation, incorporated with the purpose to finance railway projects, the question of high dependency on a govt department is not a problem.
Let’s see its loan distribution in the below chart.
#4. Dividend Payout: IRFC has given a healthy dividend payout of 30% in the past making it a lucrative option for investors interested in high dividend payout.
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Technical Analysis of IRFC
Technical analysis is all about studying previous market trends including stock price charts and volume, to predict future price movements. Technical analysis includes different indicators to study historical data such as moving averages, relative strength index (RSI), and many more.
Moving Averages: The 50-day and 200-day moving averages can provide valuable insights. IRFC’s share price is trading above the 50-day and the 200-day moving average, which often indicates a bullish trend.
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Relative Strength Index (RSI): The RSI helps identify overbought or oversold conditions. An RSI above 70 suggests overbought, while below 30 indicates oversold. The RSI of IRFC is around 78 which seems to be overbought as the share price has recently tremendous growth due to positive business sentiments.
Based on the technical analysis, IRFC’s stock has experienced fluctuations but has shown resilience during bullish trends.
You can learn about the technical analysis from our guide on how to predict the next candlestick pattern for the stock price.
Concerns and Risks
- Heavy Debt: IRFC has a high debt of Rs 4 lakh crores that it has accumulated from various sources such as SBI Hongkong, Syndicated JPY Loan, and by issuing bonds. High-interest rates on these loans could affect the overall profitability of the company.
- Economic Downturn: If there’s an economic downturn like COVID-19 or recession, that could lead to reduced demand for railway projects and potential defaults on loans.
- Government Policy Changes: Since IRFC is a government-owned entity, it is susceptible to changes in government policies, regulations, and funding priorities highly depending on the vision of the ruling party, which can also impact its operations and profitability.
- Dependence on Indian Railways: IRFC’s revenue and profitability are heavily reliant on the Indian Railways’ performance and ability to undertake new projects. Indian Railways is already running at a loss for the last couple of years. Any slowdown or delay in railway projects can have a direct impact on IRFC’s financials.
- Credit Risk: As a lender, IRFC faces credit risk when extending loans to various entities, including railway PSU companies. Defaults on loans can lead to non-performing assets (NPAs) and adversely affect IRFC’s financial health.
- Market Volatility: The stock market is inherently volatile, and IRFC’s share price can be subject to rapid fluctuations due to investor sentiments, macroeconomic factors, and market behavior.
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Conclusion
You can expect the IRFC share target price to reach Rs 80 by 2025 as per the expert’s views. With strong fundamentals, supporting technical analysis, and being a govt. backed entity, IRFC seems to have the potential for long-term investment.
But always remember, investing in the stock market comes with risks, do your proper research and keep a long-term perspective to generate better returns.
You can also read about other stocks’ target prices –
- IRCTC Share Price Target
- Suzlon Share Price Target
- Tata Motors Share Price Target
- Tata Power Share Price Target
- Adani Power Shares Target Price
FAQs
Indian Railway Finance Corporation (IRFC) is a government corporation that provides funding to railway projects in India.
The main purpose of the IRFC is to provide money to the government’s ambitious plans for railway development and get interest on the lending amount.
IRFC can be an attractive investment option for you if you are confident in the growth potential of the Indian railway sector.
According to share market experts, IRFC’s stock price target for 2025 could be in the range of Rs 80-90 per share.
Yes. Major risks are economic downturns like COVID, changes in government policies, and interest rates on heavy debt that can impact IRFC’s profitability.
You can diversify your investments to manage risk. Spread your investments across various sectors and companies to reduce exposure to any single stock.
Do both fundamental and technical analyses.
Fundamental analysis is basically going through a company’s financials, revenue growth, profit growth, debt, and top management performance.
Technical analysis entails studying historical stock price trends and indicators like moving averages and the Relative Strength Index (RSI).
Stay updated with financial news, research reports, and expert opinions on IRFC. You can also follow reputable financial websites, YouTube channels and subscribe to stock market newsletters.
Yes. But consistent learning, thorough research, starting with small amounts, and a disciplined approach, can help you mitigate your risks and increase the chances of better returns in the future.
You should go for long-term investing of 5 to 7 years to yield better returns.
No, we don’t provide investment advice. We only offer educational content on our blog.
You can go for a quarterly or annual review, which is a reasonable approach to assess your portfolio’s performance and make informed decisions.
