IRFC shares rise 4% on strong Q4, dividend payment; up 16% in 4 sessions (2024)

Shares of Indian Railway Finance Corp (IRFC)continued theirupmove on Tuesday, extending rally for the fourth straight session, after the state-owned company released its March quarter earnings and also declared final dividend for the financial year 2023-24. The sentiment was further lifted after the financing arm of the Indian Railways proposed to raise up to ₹50,000 crore from both domestic and international markets through bond issue or bank loan during the financial year 2024-25.

Continuing its gaining streak, IRFC shares gained as much as 3.86% to ₹179.90on the BSE, while the market capitalisation rose to ₹2.33 lakh crore. Early today, the railway stock opened higher at ₹ 176.70, against Friday’s closing level of ₹173.20. The PSU stock has surged nearly 16% in the past four sessions.

The railway stock touched an all-time high of ₹ 192.80on January 23, 2024, while it hit a 52-week low of 31.21 on May 26, 2023.

IRFC shares have turned multibagger in the last one year, delivering a staggering return of 435% in a 12-month period, while it has rallied 132% in six months. The counter has surged 24% in the past one month.

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IRFC released its earnings report on May 20, which showed that its net profit rose by 33.6% year-on-year (YoY) to₹1,717 crore in the fourth quarter ended March 31, 2024versus₹1,285 crore in the same period a year ago.

The total revenue from operations rose marginally by 1.73% to₹6,473 crore from₹6,193 crore in the corresponding period last year.

For the full fiscal 2024, the Miniratna public sector company posted net profit at₹6,412 crore as compared to ₹6,167 crore in FY23.The total revenue for the year stood at ₹2.66 lakh crore as against ₹2.37 lakh crore in FY23.

The board of IRFC has also declared the final dividend of₹0.70 per equity share of₹10 for the financial year 2023-24, subject to approval of shareholders at the ensuing annual general meeting (AGM).This is in addition to the interim dividend of₹0.80 per equity share declared on November 2, 2023, taking the total dividend for FY24 to₹1.50 per share, on the face value of₹10 each.

“The final dividend for the financial year 2023-24 of₹0.70 per share, if declared at the ensuing AGM, will be paid to the shareholders within 30 days from the date of the AGM,"the release notes.

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IRFC shares witnessed strong rally in the last one year, in sync with other state-owned railway-related stocks such as RVNL, IRCON, IRCTC, amid a positive outlook for the sector, coupled with the government's impetus on infrastructure development in the railways.In the Union Budget 2024, the government of India increased capital expenditure by 11.11% to ₹11.11 lakh crore, providing tailwinds to the infrastructure sector and the companies engaged in this sector will definitely benefit. The proposed capital outlay of ₹2.55 lakh crore and ₹2.78 lakh crore has been provided for railways and road & highways, respectively, which is the highest ever outlay. Besides, the government has announced the implementation of 3 major railway corridor programmes under PM Gati Sakti to improve logistics efficiency and reduce costs. It is also promoting urban transformation via Metro rail and NaMo Bharat.

IRFC, a dedicated funding arm of the Ministry of Railways, was set up specifically to raise resources from the capital market to finance rolling stock (wagons and coaches). The government currently holds 86.36% shareholding in the company.

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