- Summary:
- IRFC share price has extended its decline, but the asset remains in profit in 2024, signaling potential profit taking by investors.
IRFC share price extended its decline to a third consecutive session Tuesday. The shares traded at 150.60 after losing 3.2 percent of its value at the time of writing. IRFC shares have had a rough start in May, with losses amounting to 4.5% since the month began. In addition, there has been a notable decline in the trading volume, signaling a potential bearishness bubbling under. Nonetheless, the stock has gained 197% in the last 12 months and is up by 52.6% year-to-date. While that means many investors are in profit, it is also a double-edged sword for the stock, as there’s the risk that some investors may opt to take profit, thus exerting downward pressure on IRFC share price.
After a strong uptrend in the second half of April, IRFC share price seems to have ran out of steam to sustain the upside. The Indian government is still by far the largest shareholder in IRFC, owning 86 per cent of the company. Nonetheless, that leaves only a small percentage of shares available for trading. Nonetheless, the company is still among the most attractive ones in the market. Retail investors bought Rs 1,533 crore worth of IRFC shares in the first quarter of 2023.
Looking ahead, IRFC’s business model is likely to keep it profitable, as the Indian Government raises investment in railway infrastructure. IRFC is primarily a lender that raises money from financial markets, which it uses to acquire or build assets, which it then leases to institutions under the Ministry of Railways. Therefore, greater focus on railways by the government means more capital inflows for the company.
Technical analysis
IRFC share price is on a downward momentum, as indicated by the RSI indicator. The sellers will be in control if resistance remains at the 151.30 pivot mark. That could push them to break the support at 148.55 and potentially lower to test 145.80. Conversely, a move above 151.30 will signal control by the buyers, who will likely encounter another resistance at 153.75. However, a continuation of that control will breach past the resistance, thus invalidating the downward narrative and potentially pushing the share price further up to 156.10.
