IRFC share price was down for the third successive session on Thursday, with the stock at ₹132 at press time after going down by 2.7% on the daily chart. The bearish momentum on the stock has seen its losses pile up to 12% year-to-date, having lost nearly 7% in the last month. In addition, its daily RSI is at 40 and the price has recently crossed below the 200-day MA, adding weight to the likelihood of an extended descent.
Despite its current troubles, IRFC (BSE: IRFC) has an upside to it, being a government-owned corporation. That offers long-term stability, especially in view of the Indian Government’s current focus on infrastructure development. In addition its history of dividend yield will likely incentivise conservative long-term investors to hold on to its stock. However, a shift in government policy could potentially distabilise its growth.
Notably, IRFC share price gains has had better profit margins than other government-backed peers like REC and PFC. While IRFC margins came in at about 97%, REC and PFC were in the 29%-30% range. That said, IRFC’s P/E ratio is comparatively higher than its peers, with the figure at 31x versus PFC’s P/E of 9x and REC’s 7x. This denotes that IRFC is potentially overvalued, likely due to perceived stability and railway monopoly. However, if its earnings don’t grow fast enough to justify the high P/E, IRFC share price could face increased selling pressure.
IRFC Share Price Prediction
The momentum on IRFC share price calls for a continuation of the downward trajectory, as it seems to struggle to find its way above the ₹136.55 pivot mark. With the sellers in control, the stock will likely find initial support at ₹130.60. However, a stronger momentum will break below that level and could potentially test ₹125.65.
On the other hand, action above ₹136.55 will favour the buyers to take control. In that case, IRFC share price will likely encounter the first resistance at ₹140.65. The downside narrative will be invalid if the price breaches that level. Also, an extended control by the buyers could push the price to test ₹145.45.
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