Indian Railway Finance Corporation (IRFC), a prominent PSU under the Ministry of Railways, has been a hot topic on Dalal Street. Since its IPO listing in January 2021 at ₹26 per share, IRFC has delivered staggering returns, soaring over 800% to an all-time high of ₹229.05 on July 15, 2024. However, recent months have seen a sharp correction, with the stock now trading at ₹153 on the NSE, reflecting a 33% discount from its peak.
Should You Buy or Sell IRFC Shares Now?
The sharp correction has sparked questions among investors about IRFC’s future performance in 2025. Speaking to ET NOW Swadesh, market expert Gaurang Shah recommended a long-term investment approach for IRFC. He emphasized that the stock is best suited for those with a 2 to 2.5-year horizon, allowing ample time for their investment to grow.
“If you want to invest in the railway sector, focus on capital goods and engineering fields. For IRFC, a long-term view will yield substantial rewards,” Shah advised.
Why IRFC Remains a Strong Contender
IRFC plays a key role in financing Indian Railways’ transformation, with a strong focus on infrastructure development and passenger experience enhancement. The company has a robust order book, and successful execution of these orders is expected to reflect positively in its financial performance in the coming quarters.
The stock has consistently delivered impressive returns:
- Last 2 years: A whopping 365% return.
- Last 3 years: A stunning 570% return.
Additionally, IRFC offers a dividend yield of 0.98%, appealing to income-focused investors. The company’s market capitalization stands at ₹1,99,752.11 crore, further solidifying its stature in the PSU and railway sectors.
Long-Term Investment Potential
Market experts maintain that IRFC is a strong candidate for long-term investment. With Indian Railways undergoing significant modernization and the government emphasizing infrastructure growth, IRFC is well-positioned to benefit from the sector’s upward trajectory.
While short-term fluctuations may cause concern, investors with a long-term outlook can expect robust growth as the company leverages its pivotal role in supporting India’s rail infrastructure.
IRFC remains a compelling choice for investors seeking exposure to the railway sector’s growth story. Despite the recent correction, its long-term prospects, backed by strong fundamentals and government support, make it an attractive option for patient investors.
