Check Before You Invest : Indian Railway Finance Corporation Ltd

BSE: 543257 NSE: IRFC ISIN: INE053F01010

| Sector: BFSI | Industry: Finance Term Lending

Snapshot

Q.1 Which industry/sub-sector does Indian Railway Finance Corporation Ltd belong to?

Indian Railway Finance Corporation Ltd belongs to the BFSI sector, operating specifically within the Finance Term Lending segment.

Q.2 Is Indian Railway Finance Corporation Ltd a good quality company?

Indian Railway Finance Corporation Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Indian Railway Finance Corporation Ltd undervalued or overvalued?

Indian Railway Finance Corporation Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Indian Railway Finance Corporation Ltd a good buy now?

Indian Railway Finance Corporation Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Operating Income growth is 1.89% for FY-2025, which is below its 5-year CAGR of 15.13%, indicating slower growth.

Q.2 Return on Assets of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Return on Asset is 1.3%, which is in line with its 5-year historical median of 1.3%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	23.95	26
PPOP%	1.61	3.93
RoA%	1.3	1.3

Q.3 Return on Equity (ROE) of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Return on Equity is 12.8% for FY-2025, which is below its 5-year historical median of 13.7%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 1.61% for FY-2025, which is below its 5-year median(3.93%), indicating decreasing margins.

Q.5 Net Profit Margin of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 23.95% for FY-2025, which is below its 5-year median( 26%), indicating decreasing margins.

Q.6 Total Asset growth of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Total Asset growth is 0.77% for FY-2025, which is below its 5-year CAGR of 11.95%, indicating slower growth.

Q.7 Capital Adequacy ratio of Indian Railway Finance Corporation Ltd?

Indian Railway Finance Corporation Ltd Capital Adequacy ratio (CAR) is 672.8% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Indian Railway Finance Corporation Ltd?

Promoters hold 84.65% of the Indian Railway Finance Corporation Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Indian Railway Finance Corporation Ltd vs Industry Peers?

Indian Railway Finance Corporation Ltd AUM CAGR is 11.95%, compared to the 5-year industry median CAGR of 11.57%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Indian Railway Finance Corporation Ltd vs industry peers

Indian Railway Finance Corporation Ltd profit metrics are below the industry median level of 12.5%, indicating weaker profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	23.95	26.65
PPOP%	1.61	8.94
RoA%	1.3	1.9

Q.3 Operating efficiency of Indian Railway Finance Corporation Ltd vs industry peers?

Indian Railway Finance Corporation Ltd ROCE (5.3) is below the industry median of (7.5); while the current ROE (13.7) are below than the 5-year average Industry ROE (21). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	23.95	26.65
PPOP%	1.61	8.94
RoA%	1.3	1.9
ROCE%	5.8	7.5
ROE%	12.8	21

Valuation & price assessment

Q.1 Stock return of Indian Railway Finance Corporation Ltd over the last decade?

Over the last 5 years, the stock has delivered a CAGR of 37.92% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	37.9%	44.4%	-16.2%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	19.46	15.87	13.28
Price to Book	2.41	2.07	1.13
Price to Sales	15.84	11.78	4.77
EV to EBITDA	10.97	17.30	10.31

Q.4 Valuation ratios of Indian Railway Finance Corporation Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.41% is higher than its historical median of 2.07%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Indian Railway Finance Corporation Ltd return on invested capital (ROIC) is 4.5% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

Check more companies

1. HDFC Bank

2. SBI

3. ICICI Bank

4. Bajaj Finance

5. Life Insurance Corp

6. Axis Bank

7. Kotak Mahindra Bank

8. Bajaj Finserv

9. Shriram Finance

10. SBI Life Insuran

Check trending companies

1. Siemens Ltd.

2. Tata Elxsi Ltd.

3. Tata Power Company Ltd.

4. Aditya Birla Capital Ltd.

5. L&T Technology Services Ltd.