IRFC shares surged 12% this week; what's next for this rail PSU stock?

IRFC shares surged 12% this week; what’s next for this rail PSU stock?

Shares of Indian Railway Finance Corporation Ltd (IRFC) on Friday continued their upward run for the fifth consecutive session. The stock today settled 5.19 per cent higher at Rs 158.05. At this price, it has gained nearly 12 per cent during this week. Moreover, the multibagger counter has gained around 120 per cent in last six months and 402 per cent in a year.

The stock saw heavy trading volume on BSE today as around 1.58 crore shares changed hands. The figure was way more than the two-week average volume of 42.93 lakh shares. Turnover on the counter came at Rs 246 crore, commanding a market capitalisation (m-cap) of Rs 2,06,547.74 crore.

On technical setup, support on the counter could be seen at the Rs 152-150 zone. And, a decisive close above Rs 160 level is required for further upside in the near term.

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, “The stock looked strong on daily charts. It may hit an upside target of Rs 175 in the near term. Keep stop loss placed at Rs 152.”

Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “Support will be at Rs 150 and resistance at Rs 160. A decisive close above Rs 160 level may trigger a further upside till Rs 170. The expected trading range will be between Rs 145 and Rs 175 for a month.”

The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock’s 14-day relative strength index (RSI) came at 51.58. A level below 30 is defined as oversold while a value above 70 is considered overbought.

IRFC borrows funds from the financial markets to finance the acquisition or creation of assets which are then leased out to the Indian Railways or any entity under the Ministry of Railways. As of March 2024, promoters held an 86.36 per cent stake in the ‘Navratna’ PSU.

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