Indian Railway Finance Corporation (IRFC) is maintaining its impressive performance in the stock market, with its shares reaching a new high for the 52-week period on Friday.
As of 11:10 am, IRFC shares were trading 7.19% higher at around Rs 156 each on the Bombay Stock Exchange (BSE). During early trading, the stock surged to Rs 157.60, marking a fresh 52-week high. Currently, the company's market capitalization exceeds Rs 2 lakh crore.
It's worth noting that IRFC shares have commenced the calendar year on a robust note, following substantial returns to investors in 2023. Over the last five trading sessions, the stock has surged over 28%, with a cumulative gain of 55% in January alone.
Taking a broader perspective, IRFC has witnessed a remarkable increase of over 376% in the past 6 months and 371% over the last year.
The upward momentum of IRFC shares aligns with similar movements in other railway Public Sector Undertakings (PSUs) like RVNL, IRCTC, and IRCON International. Analysts attribute this surge to their optimism about the railway sector in anticipation of the Interim Budget for 2024.
Experts believe that the government may announce a higher capital expenditure (capex) for Indian Railways, reflecting its emphasis on infrastructure development. Notably, the Union Budget for 2023-24 revealed a significant increase in the capital outlay for Indian Railways, reaching Rs 2.40 lakh crore—an almost 75% rise.
A Business Today report quoted an analyst, Vishal Periwal, Sector Analyst (Infra) at IDBI Capital, stating, "With the Budget around the corner, railway stocks have been witnessing sharp gains. It could be due to anticipation of a record budgetary allocation for the sector."
While analysts are generally bullish on IRFC, they caution investors about the stock being in an overbought state, advising them to remain vigilant. As the budget approaches, there is an expectation that IRFC will gain further momentum, driven by anticipated record budgetary allocations.
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