IRFC Stock Price Target for 2025: Why it is the Best Railway Share to Buy on Budget Day?

IRFC Stock Price Target: The Indian Railway Finance Corporation (IRFC) has been an important player in the Indian stock market, especially in the railway sector. For investors, it’s always exciting to track stocks like IRFC because of its direct connection to India’s extensive railway network.

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But just how well is IRFC doing? Should you invest in its shares in 2025? Let’s break it down and see what we can expect for IRFC’s share price and its future.

What is IRFC?

Before we know the stock price targets and financial details, let’s quickly understand what IRFC is all about.

Indian Railway Finance Corporation (IRFC) is a company under the Government of India, which helps fund the Indian Railways’ infrastructure and other essential projects.

IRFC plays a crucial role in funding the purchase of trains, infrastructure, and more, which are vital for the railway sector’s growth and modernization.

When you invest in IRFC shares, you are basically investing in the company that provides financial support to one of the largest railway networks in the world.

As of February 1, 2025, IRFC shares have been in focus because of Budget 2025, with people expecting the government to announce big plans for the railway sector. On the day before the budget, IRFC shares surged by nearly 2%, closing at ₹150.99 on the National Stock Exchange (NSE).

Now, IRFC shares have had an interesting history. They have delivered great returns to investors in the past. In fact, IRFC shares saw a big jump in their value over the last few years, but they have been somewhat stagnant recently.

In the past year, IRFC shares have not performed well. The price went as high as ₹229.05 in July 2024, but it’s now dropped by more than 30%, making it seem like a bargain. This sharp drop in price is mainly due to profit booking, which happens when investors sell their stocks to lock in profits.

For the past 12 months, IRFC shares have yielded a negative return of 14%, meaning if you had invested in it one year ago, you would have lost money. Despite this, experts believe IRFC is getting ready for a recovery, especially with the upcoming announcements from the government.

Now, let’s focus on the share price target for IRFC in 2025. Akshay Bhagwat, a market expert from JM Financial Services, has shared a buy recommendation for IRFC shares, suggesting it’s a good pick for trading in the near future.

According to Bhagwat, the IRFC share price chart shows signs of a recovery rally. This means that, after the recent fall in prices, IRFC stock is expected to rise again.

Investors are excited about the upcoming Budget 2025, where many people expect higher capital expenditure (capex) for the railway sector, which would directly benefit IRFC.

The expert’s short-term target for IRFC is between ₹175 and ₹180, which is a rise from the current price of ₹150.99. He also mentioned a stop loss at ₹132, which means if the stock goes below ₹132, investors should sell to minimize losses.

This shows that, in the next 1-2 months, IRFC shares are expected to go up in value, giving traders and investors a chance to make profits.

A Quick Look at IRFC’s IPO and Stock History

Let’s take a look at how IRFC stock has performed since it debuted on the stock market. IRFC’s Initial Public Offering (IPO) took place in January 2021, and the IPO price was ₹26 per share. Since then, the stock has gone up significantly.

In just about 3 years, the stock price of IRFC surged from ₹26 to ₹229.05, making early investors a massive return of nearly 900%. This is what is called a multibagger return, meaning the stock price increased many times over.

IRFC Dividend: What Investors Are Getting

Another attractive feature of IRFC shares is its dividends. A dividend is a portion of the company’s profit that it shares with its shareholders.

In 2024, IRFC paid two dividends to its shareholders:

₹0.80 in November
₹0.70 in August

These small payouts might seem modest, but they add to the overall appeal of the stock, especially for long-term investors who want to generate passive income from their investments.

The dividend yield for IRFC is 0.99%, which is a decent return for shareholders. Dividend yield is just the annual dividend paid as a percentage of the stock’s current price.

#IRFC Dividend History: A Look Back

IRFC has been consistent in paying out dividends. Here’s a quick summary of the company’s dividend history in recent years:

2023: Dividend of ₹1.50 per share
2022: Dividend of ₹1.43 per share
2021: Dividend of ₹1.82 per share (first year after listing)

These regular dividends show that IRFC is a reliable company for long-term investors who are looking for consistent payouts, in addition to the potential capital gains from stock price appreciation.

#What Should Investors Do with IRFC Stock?

For investors, the key question is whether to buy, hold, or sell IRFC stock. Here’s a simple breakdown:

1. Short-Term Investors:

If you are looking for short-term gains, experts suggest that IRFC shares could rise to ₹175-₹180 in the next 1-2 months. In this case, you might consider buying the stock now and selling it once it reaches the target.

2. Long-Term Investors:

If you’re in it for the long haul, IRFC is a good stock to hold, especially since it pays regular dividends. The company is tied to the future growth of the Indian railway sector, which is set to expand significantly, and this could lead to higher earnings for IRFC.

3. Dividend Investors:*

If you’re looking for regular income, IRFC is an attractive option. The company has a history of paying out dividends, and while it’s not huge, it can provide some passive income while you wait for the stock price to rise.

#IRFC’s Future: What to Expect in the Coming Years

Looking ahead, there are a few factors that could drive the growth of IRFC shares:

1. Railway Sector Expansion: The Indian government has been focusing a lot on improving and modernizing the railway network. This includes building new railways, upgrading the existing ones, and buying new trains. These projects will require a lot of funding, and IRFC will play a major role in financing these efforts.

2. Government Support: Being a government-backed company, IRFC is likely to receive continued support from the Modi government. This means that there will always be a demand for its services, and as the railway sector grows, IRFC will benefit.

3. Rising Capex: As mentioned, there are expectations for the Budget 2025 to announce more investments (or capital expenditure) in the railway sector. If this happens, it could push IRFC’s share price higher as investors start to see it as a safer and more profitable option.

4. Diversification: While IRFC is primarily focused on the railway sector, there are opportunities for it to diversify into other areas related to infrastructure financing. This could open up new revenue streams and further boost the stock price

Conclusion: Should You Buy IRFC Stock in 2025?

In 2025, IRFC appears to be a solid investment, both for short-term traders and long-term investors. While its recent performance hasn’t been great, the railway sector’s future looks bright, especially with government investments and modernization efforts.

The stock has the potential to recover in the short term, with experts predicting a rise to ₹175-₹180 in the next couple of months. Long-term investors can hold on to their shares and benefit from both capital appreciation and dividends in the years to come.

If you’re looking for a stable, government-backed company with solid growth prospects and regular payouts, IRFC could be a great addition to your portfolio.

Disclaimer: The information provided in this article is for general informational purposes only and should not be considered as financial or investment advice. Always consult a professional financial advisor before making any investment decisions.