IRFC Share Price Target

IRFC Share Price Target 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030 | Looking at governments future plans we can expect the IRFC share price to go up to Rs.68 to Rs.72 by 2025 and further it may reach to Rs.140 to Rs.152 by 2030.

IRFC Share Price Target 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030

Brief overview of IRFC (Indian Railway Finance Corporation)

Indian Railway Finance Corporation (IRFC) is a Public Sector Enterprise controlled by the Ministry of Railways, Govt. of India. IRFC is established on 12^th December 1986 to manage the financial services of Indian Railways primarily acquisition of rolling stock assets, leasing of railway infrastructure assets, and lending to entities under the Ministry of Railways (MoR).

IRFC is also responsible for raising funds for MoR that is required to procure rolling stock assets (wagons, trucks, electric multiple units, locomotives, coaches), its improvement, expansion, and assets management.

Government launched IRFC IPO in January 2021, mainly with the purpose of to increase company’s equity capital base to meet business future growth requirements. The main function of IRFC is to fulfill the considerable ‘Extra Budgetary Resources’ (EBR) requirement of the Indian Railways.

Fulfillment of these requirement through market borrowings at the most competitive rates and terms. The Company’s principal therefore is to borrow funds from the financial markets to finance the acquisition or creation of assets which are then leased out to the Indian Railways.

Typically, the period of lease is around 30 years with the first 15 years focused on recovering the principal amount along with the weighted cost of borrowing plus a margin and the last 15 years to generate revenue. It has the highest credit ratings for an Indian issuer for domestic and international borrowings.

IRFC Stock performance in past

IRFC’s IPO is launched on 18^th January 2021 of around Rs.4633.38 Crore with IPO price of Rs.25 to Rs.26 per share. IPO listed on NSE and BSE both exchanges on 19th January 2021.

The listing was not satisfactory as per the expectation and stock has not shown much volatility. Further it fallen to around Rs.19 to Rs.20 in June 2022. Due to the overall negative sentiments in market and global recession fever.

After that IRFC share price in 2022 shown the sudden spike since July month and it went up to Rs.37 all-time high in November month. Again in IRFC share price in 2023 opened around Rs.33 In January and suddenly in March it fell to Rs.26.

Currently as of April month it is trading at Rs.31 and performing well as governments has shown positive interest to grow the Railway development programs. For that many projects are aligned further so IRFC will have very positive impact of that.

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IRFC Fundamental Analysis

In last 6 months promoter holding in the company hasn’t changed also the mutual fund holding is constant.

• Current Market Cap: The current market cap of IRFC Ltd as of April 2023 is around Rs.41100 Cr.
• P/E Ratio: Current price to earnings ratio is 6.33 which is increased gradually since last year.
• Industry P/E ratio: Industry PE ratio is 13.18
• Debt to Equity ratio: Debt to equity ratio is 9.13
• ROE & Dividend Yield: ROE is 15.84% with 4.55% dividend yield.
• 52Week High/Low: Indian Railway Finance Corporation Share Price as on 13th October 2023 is Rs.76.65, and its 52Week High is Rs.92.35 and 52Week low is Rs.21.20

IRFC current financial standing

As per the latest financial results published by IRFC its operating revenue is Rs.6218.10 Crores which around 22% growth when compared to last year’s revenue was Rs.5096.96

Profit before tax/Net profit is grown by 2.4% with Rs.1633.45 Crores against the last years Rs.1593.91 Crores.

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IRFC Share Price Target 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030

Year	First target	Second target
IRFC share price target 2023	38	42
IRFC share price target 2024	50	55
IRFC share price target 2025	68	72
IRFC share price target 2026	79	84
IRFC share price target 2027	89	95
IRFC share price target 2028	103	109
IRFC share price target 2029	120	131
IRFC share price target 2030	140	152

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What will be the IRFC Share Price Target 2025?

Recently Indian Railways announced the expansion of Vande Bharat Express Trains by August 2023, so it has begun the production of 120 Advanced Vande Bharat Express Trains. The Indian Governments interest in expansion of Advanced Railways projects is the main factor will drive the IRFC share price further.

India is building up its Railways across the country. In 2023 the government has allocated around Rs.2.4 Lakh crores on the modernization, development of railways, which is almost highest ever spending in India’s history.

Indian Railways main focus is now to regain its share of freight traffic which they have lost due to poor connectivity. So government is planning to fix this by laying out new railway lines along with upgrading existing lines.

So even if you see a rise in revenues in the next few years, you may see a big jump in share price. As this is clearly indicates IRFC will have major impact on this development parts as these things will require lot of funding which will be arranged by IRFC. Looking at governments future plans we can expect the IRFC share price to go up to Rs.68 to Rs.72 by 2025

Risks and challenges for IRFC

IRFC’s main risk or beneficial point both we can say is its dependency on Indian Railways, as it accounts for more than 90% of its business. Because of that IRFC’s financial performance is highly dependent on Indian Railway’s growth and expansion plans.

In any case if governments changes its policies towards Railway’s growth or expansion it directly impact on IRFC’s business and ultimately its share price.

As per IRFC’s business model, it borrows money from the market and that money lends to Indian Railway at higher interest rates. Till now this model has worked well for IRFC. In this case the its exposure to interest rates is very high so any changes in interest rates directly increase the borrowing cost for IRFC and further it will lower the profitability of IRFC.

IRFC is government owned company, so any political instability will have effect on company’s business.  

Conclusion

While IRFC’s IPO was well-received by the market, there are some significant risks and challenges that could impact its share price growth. Investors should carefully consider these risks before investing in IRFC’s shares.

IRFC stock price can be considered moderately valued when compared to the current market and it has not performed well as per the expectations.

Its financial growth has been moderate for a last few years and profitability is also average which is not good nor bad. But yes the stock is underpriced and not in overbought zone.

IRFC’s heavy dependence on the Indian Railways, interest rate risk, competition from other financial institutions, regulatory risk, and economic and political instability are some of the factors that investors should monitor closely.

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