The IRFC share price is Rs 141.85 as of January 16, 10:20 PM IST. This is a 9.03% increase from the previous close of Rs 130.1. The IRFC stock has been on a bullish run lately, hitting a fresh 52-week high of Rs 142.2 on January 16. The stock has gained over 450% since its 52-week low of Rs 25.4 on January 29, 2023.
IRFC is a public sector enterprise under the Ministry of Railways, engaged in financing the acquisition of rolling stock and leasing it to the Indian Railways. IRFC also funds railway projects, such as electrification, doubling of tracks, and station development. IRFC has a monopoly in the railway financing market, with a 100% market share in rolling stock leasing.
IRFC has a strong financial performance, with a net profit of Rs 15.5 billion and a net profit margin of 97.75% for the quarter ended September 30, 2023. IRFC also has a stable revenue stream, as it earns lease rentals from the Indian Railways, which are backed by the sovereign guarantee of the Government of India². IRFC has a low risk profile, as it has a zero non-performing asset (NPA) ratio and a high credit rating of Aaa.
IRFC is also a good dividend payer, with a dividend yield of 1.15% as of January 16. IRFC has declared an interim dividend of Rs 1.65 per share for the financial year 2023-24, which is 50% higher than the previous year². IRFC has a consistent dividend payout policy, with a payout ratio of 30% of its net profit.
Some of the factors that have contributed to the recent rally in IRFC share price are:
- The positive sentiment in the railway sector, as the Indian Railways has announced various initiatives to improve its operational efficiency, passenger amenities, and safety standards.
- The robust demand for IRFC's bonds, as it has successfully raised Rs 2,500 crore through a private placement of secured redeemable non-convertible debentures (NCDs) at a coupon rate of 6.8% on January 15. IRFC plans to raise another Rs 22,000 crore through bonds in the current financial year.
- The attractive valuation of IRFC, as it is trading at a low price-to-earnings (PE) ratio of 27.87 and a low price-to-book (PB) ratio of 0.00 as of January 16. IRFC is also trading at a discount to its peers in the finance sector, which have an average PE ratio of 13.91