Are you invested in IRFC or planning to invest in IRFC share then this post is going to be very useful for you. In this post we will analyze all about IRFC (Indian Railway Finance Corporation), Company’s fundamentals, future view, company’s outlook, their financials, shareholding patterns etc , Based on these analysis, we will forecast IRFC share price target 2023,2024,2025 and 2030.
About IRFC
Indian Railway Finance Corporation (IRFC) was set up on 12th December 1986 as the dedicated funding arm of the Indian Railways for mobilizing funds from domestic as well as overseas Capital Markets.
IRFC is a Miniratna I and Schedule ‘A’ Public Sector Enterprise under the administrative control of the Ministry of Railways, Govt. of India.
It is also registered as Systemically Important Non–Deposit taking Non-Banking Financial Company (NBFC – ND-SI) and Infrastructure Finance Company (NBFC- IFC) with Reserve Bank of India (RBI).
IRFC has played a significant role in its more than 35 years of existence in supporting the expansion of the Indian Railways and related entities by financing a significant proportion of its annual plan outlay
Objective of the company:
The main objective of the company is to meet the predominant portion of ‘Extra Budgetary Resources’ (EBR) requirement of the Indian Railways through market borrowings at the most competitive rates and terms.
Its aim is to be one of the leading Financial Service Companies in the country, for raising funds from the capital market at competitive cost for augmenting railway plan finances, duly ensuring that the Corporation makes optimum profits from its operations.
The Company’s principal business therefore is to borrow funds from the financial markets to finance the acquisition / creation of assets which are then leased out to the Indian Railways.
IRFC Share Price Target 2023
IRFC Share Price Target 2023
| Year | IRFC Share Price in 2023 |
| 2023 | ₹36 to ₹46 |
Company’s Info
| IRFC | Indian Railway Finance Corporation Ltd |
| Company Website: | irfc.co.in |
| CMD | Amitabh Banerjee |
| Market Cap (Cr.) | ₹39,597.57 |
| High / Low | ₹ 37.1 / 19.3 |
| Stock P/E | 6.13 |
| Book Value | ₹ 33.3 |
| P/B (Price to Book Value) | 0.91 |
| Face Value | ₹10.00 |
| ROCE | 5.11 % |
| ROE | 14.84% |
| Dividend Yield | 4.61 % |
Business Overview:
IRFC (Indian Railway Finance Corporation) is a financial institution that provides finance to Indian Railways. IRFC raises funds through borrowings from the market at lowest rate, and it uses these funds to provide loans to Indian Railways for leasing and lending operations.
IRFC Borrowing Operations:
IRFC raise funds through various sources at lowest doable market rate. Their source of funds include taxable and tax-free bonds issuances, term loans from banks and financial institutions, commercial papers, external commercial borrowings and asset securitization. Due to their strong credit ratings, IRFFC get funds at significantly low cost.
Borrowing Profile for 2021-22:
| Taxable Bonds | ₹1,98,479 Mn |
| Rupee Term Loans | ₹4,29,000 Mn |
| External Commercial Borrowing | ₹1,20,041.70 Mn |
| 54 EC Bonds | ₹11,610.1 Mn |
IRFC Lending Operations:
IRFC lend funds to MoR (Ministry of Railway) and other Railway Entities in order to fuel their growth plan. They have provided loans to Rail Vikas Nigam Limited (RVNL) and IRCON.
IRFC Leasing Operations:
- IRFC uses a leasing approach to fund Indian Railways’ Rolling stock and project assets.
- The normal lease term is 30 years, with a primary component of 15 years and a secondary component of 15 years.
- During the primary lease period, the principal component and interest are recovered as part of the lease.
- Secondary lease period assets are normally transferred to the MoR (Ministry of Railways) for a nominal sum at the conclusion of the lease.
- IRFC have a cost-plus leasing agreement with the Ministry of Railways, which ensures consistent growth in IRFC income and profitability. MoR pays half-yearly lease rentals in advance, which include both principal repayment and interest.
Key Highlights:
- Based on market capitalization of Company, it is in the list of top 500 listed companies as on 31st March 2022.
- IRFC has been ranked 96th in Fortune India 500 list of companies based on financials of fiscal 2020-21.
- IRFC has also become the first Central Public Sector Enterprise (CPSE) to list our USD 500 million green offshore bonds exclusively at NSE-IFSC and India INX in the GIFT City, Gandhinagar.
- For the year 2022-23, the annual funding target for IRFC has been fixed at ₹ 66,500 crore which includes ₹ 31,000 crore for funding of Rolling Stock assets and funding of Railway projects to the extent of ₹ 35,500 crore.
- IRFC has made a huge contribution in the development and growth of Indian Railways and Railway entities including Rail Vikas Nigam Limited (RVNL) and IRCON.
- IRFC raised funds to the extent of USD 500 Mn through Green Bonds at a fixed coupon of 3.57% Per annuum payable semi annually.
- IRFC raised Green/JPY Loan equivalent to USD 1.10 Bn/INR 8,274.23 Cr comprising of two tranches of USD 700 Mn and USD 400 Mn having tenor of 10 years and 7 years respectively through Green Loan (Offshore loan)
Indian Railways Sector:
- The Government of India’s commitment to strengthen the country’s railway infrastructure is reflected through various initiatives undertaken to boost the sector such as a 16.9% increase in allocation in the Union Budget 2022-23 to the tune of ₹ 1,40,367.13 crore.
- Additionally, the development of 400 new ‘Vande Bharat’ trains and 100 freight terminals over the next three years under the PM Gati Shakti project will provide the much needed impetus to the sector.
IRFC Share Price Target 2024-2025
IRFC Share Price Target 2024
So based on above points the year 2024 next target for IRFC share would be 56 and 66.
| Year | IRFC Share Price in 2024 |
| 2024 | ₹56 to ₹66 |
IRFC Share Price Target 2025
| Year | IRFC Share Price in 2025 |
| 2025 | ₹80 to ₹96 |
Credit Rating for IRFC
During the financial year 2021-22, the Company’s long-term domestic borrowing program was awarded the highest credit rating of “CRISIL AAA/ Stable”, “[ICRA] AAA (Stable)” and “CARE AAA [Triple A]” by CRISIL, ICRA and CARE respectively.
The Company also got its short-term borrowing program rated, obtaining the highest rating of ‘‘CRISIL A1+’’, ‘‘[ICRA] A1+’’, and “CARE A1+ [A One Plus]” by CRISIL, ICRA and CARE.
During the financial year 2021-22, three international credit rating agencies – Standard & Poor’s, Fitch and Moody’s – have awarded “BBB- with Stable Outlook”, “BBB- with Negative Outlook” and “Baa3 with Stable Outlook” ratings respectively to IRFC.
Japanese Credit Rating Agency has awarded “BBB+ with Stable Outlook” rating to IRFC.
| Credit Agency | Credit Rating |
| CRISIL | AAA/ Stable |
| ICRA | AAA (Stable |
| CARE | AAA [Triple A] |
| Standard & Poor’s | BBB- with Stable Outlook |
| Fitch | BBB- with Negative Outlook |
| Moody’s | Baa3 with Stable Outlook |
IRFC Financial Performances
Revenue :Revenue from operations of Company has increased by ₹ 45,280.47 million from ₹ 1,57,702.21 million in 2020-21 to ₹ 2,02,982.68 million in 2021-22, showing a growth of 28.71 %.
Profit before Tax (PBT): Profit before Tax (PBT) of Company for the year ended 31st March 2022 was ₹ 60,901.55 million as compared to ₹ 44,161.31 million for the previous year, registering a growth of 37.91%.
Dividends: Company had declared the Interim Dividend @ 7.70% i.e., ₹ 0.77/- per equity share having face value of ₹ 10/- each for F.Y. 2021-22 and has also recommended a Final Dividend @ 6.30% i.e., ₹ 0.63/- per equity share, subject to approval of the shareholders at the ensuing Annual General Meeting, thus the total dividend for the financial year 2021-22 would amount to ₹ 1.40/- per equity share of ₹ 10/- each.
Performance in FY2022
| Net worth | ₹4,09,963.40 Mn |
| EBIDTA | ₹20,17,94.23 Mn |
| PAT | ₹60,898.36 Mn |
| Year-on-Year growth in AUM | 15.32% |
| Year-on-Year growth in revenue | 28.87% |
Pros:
- Stock is trading at 0.99 times its book value
- Stock is providing a good dividend yield of 4.22%.
- Company has delivered good profit growth of 45.5% CAGR over last 5 years
- Company has been maintaining a healthy dividend payout of 20.4%
- Company PEG ratio is 0.15
- DIIS shareholding is 3.39%
Cons:
- Company has low interest coverage ratio.
- Company have a low return on equity of 13.8% over last 3 years.
IRFC Share Analysis Video
IRFC Share Price Target 2030:
| Year | IRFC Share Price in 2030 |
| 2030 | ₹220 to ₹245 |
IRFC Shareholding Patterns:
As on 31st March 2022, 86.36% of the paid-up equity share capital of the Company comprising of 11,28,64,37,000 Equity Shares of H 10/- each were held by President of India acting through administrative ministry i.e., Ministry of Railways (MoR).
The balance 13.64% of paid-up equity share capital was held by public.
IRFC Share related FAQ
Is IRFC giving dividend ?
Yes IRFC give dividends to there shareholders, even IRFC dividend yield is very high it is 4.22 %
Is IRFC a debt free company?
Actually No, The Company’s principal business therefore is to borrow funds from the financial markets to finance the acquisition / creation of assets which are then leased out to the Indian Railways. Therefor on IRFC balance sheet you will find a huge loan amount.
What is positive about IRFC Share?
The company is maintaining a healthy dividend payout of 20.4%, company delivered good profit growth of 45.5% CAGR over last 5 years and IRFC share is trading at 0.99 times its book value
IRFC Share Price Target 2023?
IRFC share price target 2023 would be between ₹36 to ₹46 based on technical analysis.
IRFC Share Price Target 2024?
IRFC share price target for the year 2024 could be between the range of ₹56 to ₹66.
IRFC Share Price Target 2025?
IRFC share price target for the year 2025 could be between the range of ₹80 to ₹96, based on current and past performance of the company.
IRFC Share Price Target 2030?
IRFC share price target for the year 2030 could be between the range of ₹220 to ₹245, based on company’s fundamentals.
Conclusion:
IRFC is a Public Sector Enterprise under the Ministry of Railways, IRFC raises funds through borrowings from the market at lower interest rate and provide to Indian railway and earns profit, the company is working on borrowings, don’t have their own capital. Some of the credit ratings have also given good ratings and in 2022 we have seen good moves in the share price of IRFC. Here I have tried to mention all the parameters related to company so it’s your turn to decide whether you want to invest in IRFC or not.
That’s the end of the post “IRFC Share Price Target 2023,2024,2025-2030”. Please share your views below in the comment section.
Source: IRFC Annual Report & Google
Disclaimer: On this page all the mentioned entries are based on the date the post was written, these could be change in future.
Nirmal is a NISM Certified Derivative Trader & the Founder of InvestandEarn.net (Financial Blog). He entered the world of Equity research to explore his interests in financial markets having 5+ Years of Experience in Share Market Trading & Investing. Nirmal frequently writes about Share Market Trading & Investment and publishes his personal view on the market. Drop him a mail at nirmal.jaysval@investandearn.net.
