Indian Railway Finance Corp Ltd (IRFC) Share Price Highlights: How has been Its historical performance?

Indian Railway Finance Corp Ltd (IRFC) Share Price Highlights: How has been Its historical performance?

Indian Railway Finance Corporation Limited (IRFC) the dedicated financing arm of Indian Railways, has delivered volatile historical performance since its IPO listing in January 2021, with strong multi-year gains driven by railway capex tailwinds offset by recent corrections amid high valuations and interest rate pressures. As of late November 2025, the stock trades around ₹117-118, down 23% over the past year but up over 250% in three years, reflecting its sensitivity to government spending cycles and PSU sentiment.​

Historical Returns Snapshot

IRFC's stock price CAGR highlights a boom-bust pattern typical of infrastructure-linked PSUs: exceptional short-to-medium term gains followed by mean reversion.​

• 1 Year: -21% to -23% (market correction and premium unwinding)​

• 3 Years: +250% to +547% (post-IPO rally on low base and budget boosts)​

• 5 Years: +374% to +432% (revenue compounding at 15% CAGR supporting re-rating)​

• 52-Week Range: ₹108-₹167; All-Time High: ₹229​

Recent trends show sideways action: -4% in 1 month, flat over 3 months, with Q2 FY26 net profit hitting a record ₹1,777 crore despite revenue softness.​

Financial Performance Evolution

Revenue has grown steadily at 15% CAGR over 5-10 years, fueled by expanding assets under management (AUM now ₹4.62 lakh crore), though profit growth lags at similar rates due to high debt (D/E 7.83) and interest costs.​

Fiscal Year	Revenue (₹ Cr)	Net Profit (₹ Cr)	EPS (₹)	ROE (%)	Dividend (₹)
FY21	15,771	4,416	3.54	-	1.05 ​
FY22	20,302	6,090	4.66	-	1.40 ​
FY23	23,933	6,337	4.85	14	1.50 ​
FY24	26,656	6,412	4.91	13	1.50 ​
FY25 (TTM)	27,156	6,502	4.98	12.8	1.60 ​

Dividend yield remains steady at 1.3-1.4%, with a 30-32% payout ratio, appealing for income-focused long-term holders.​

Valuation and Peer Comparison

IRFC trades at a premium to peers despite weaker fundamentals: P/E 22.5x (vs. Power Finance Corporation  at 4.8-5.4x and REC  at 5.5-5.8x) and P/B 2.7-3x (peers <1.5x). Over the past year, IRFC underperformed peers, returning -22% vs. PFC's +27-43%.​

This reflects railway monopoly status but highlights risks like low interest coverage and slower ROE (13.6% vs. peers' higher teens).​

Key Drivers and Risks

Long-term performance ties to Indian Railways' ₹2.5 lakh crore+ annual capex, government backing (86% promoter holding), and lease financing model yielding stable spreads. Upside catalysts include modernization projects and AUM growth; downsides involve rate hikes, execution delays, and valuation compression.​

This analysis is for educational purposes only, not investment advice. Past performance does not guarantee future results—assess risks, diversify, and consult a SEBI-registered advisor.

How does IRFC compare to peer rail financing firms on metrics

Indian Railway Finance Corporation Limited (IRFC)  trades at a significant premium to its peer NBFCs in the infrastructure financing space—primarily Power Finance Corporation  (PFC), REC Limited , HUDCO , and IREDA —on key valuation metrics like P/E (22.5x vs. peers' 4.8-23x) and P/B (2.9-3.1x vs. 1.1-3.9x), despite lower ROE (12-13% vs. peers' 15-20%). This reflects IRFC's railway monopoly but exposes it to higher re-rating risks amid similar debt profiles (D/E ~7-8x across most).​

Key Metrics Comparison Table

Metric	IRFC	PFC	REC	HUDCO	IREDA
Market Cap (₹ Cr)	153,000-154,000​	119,000-120,000​	95,000​	47,900​	40,000​
P/E (TTM)	22.5x​	4.8x​	5.5x​	17.1x​	23.3x​
P/B	2.9-3.1x​	1.1x​	1.3x​	2.7x​	3.9x​
ROE (%)	12.3-13.6​	19.5-21​	20.4​	15.1​	16.5​
ROA (%)	~1.5-2​	2.5-2.8​	2.5​	-	2.2​
Dividend Yield (%)	1.3-1.4​	4.5​	5.5​	2.6​	0​
1Y Returns (%)	-22​	-26​	-31​	+9​	-28​
Promoter Holding (%)	86​	56​	53​	75​	72​

Data as of late November 2025; peers represent core infra/PSU financing comparables (power, rural electro, housing, renewables).​

Valuation and Profitability Insights

IRFC's elevated P/E and P/B stem from post-IPO re-rating on stable railway lease income, but it lags peers in efficiency: ROE trails PFC/REC by 7-8 points due to higher debtor days (3,800+) and interest coverage pressures. PFC and REC dominate on scale (larger PAT/Q: ₹5,700 Cr vs. IRFC's ₹1,800 Cr) and yields (4.5-5.5%), making them cheaper entry points for dividend hunters.​

Growth and Risk Profile

All peers show 15-20% revenue CAGR, but IREDA edges on ROE expansion while PFC leads ROA; IRFC's 86% government stake offers safety but ties return to rail capex (₹2.5 lakh Cr+ budget). Risks uniform rate sensitivity, NPAs; IRFC underperforms 1Y vs. PFC (+43% in some periods) but beats on 3Y returns (~250%).​

This comparison uses latest available metrics for educational review, not advice—market conditions evolve, so verify with advisors.