Our 8th company in the Series of Best Stocks Below Rs. 50 is Indian Railway Finance Corp Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Indian Railway Finance Corporation Ltd, located in New Delhi, India, is a financing arm of the Ministry of Railways.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹30,841cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 6.98
Sector PE Ratio: 28.17
PE Ratio of this company is low but better than Sector’s PE. So it’s a Average PE than the peers of this company.
PB Ratio : 0.86
Sector PB Ratio : 2.39
PB Ratio of this company is low than Sector’s PB ratio. So it’s Average PB than the peers of this company.
Dividend Yield : 4.45%
Sector Dividend Yield : 0.53%
Dividend Yield of this company is high than Sector. Dividend of this company is Good than the peers of this company.
ROE: 13.4%
ROCE: n/a
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 15,770.86 | 4,416.12 |
| 2020 | 13,421.09 | 3,192.08 |
| 2019 | 11,133.59 | 2,254.73 |
| 2018 | 9,268.38 | 2,054.66 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 3,42,138.33 | 2,45,204.38 | 1,81,561.82 | 1,47,525.66 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021, Company have 3,42,138.33 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| -89,907.52 | -62,700.85 | -41,748.61 | -28,076.27 |
Debt Level: Indian Railway Finance Corp Ltd debt to equity ratio (878.5%) is considered high.
Reducing Debt: Indian Railway Finance Corp Ltd debt to equity ratio has increased from 797% to 878.5% over the past 5 years.
Debt Coverage: Indian Railway Finance Corp Ltd operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: Insufficient data to determine if Indian Railway Finance Corp Ltd interest payments on its debt are well covered by EBIT.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 86.36% | 0.86% | 2.62% | 1.13% | 9.03% |
| Mar 2021 | 86.36% | 1.44% | 3.02% | 1.21% | 7.97% |
| Dec 2020 | 86.36% | 2.23% | 2.82% | 0.28% | 8.30% |
| Sep 2020 | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Above table showing there is no big change in Promotors holding which is 86.36% in June 2021. FIIs invested in June 2021 with 0.86% and retail investor is 9.03%.
Investment Checklist for Indian Railway Finance Corp Ltd.
- The company is currently profitable
- Earnings have grown by 27.3% per year over past 5 years
- Share price has been stable over the past 3 months
- Profit margins improved or Indian Railway Finance Corp Ltd became profitable
- At least 3 years of financial data is available
- No concerning events detected
- Revenue is meaningful (₹51B)
- Market cap is meaningful (₹308B)
- Indian Railway Finance Corp Ltd does not have negative shareholders equity.
- Debt is not well covered by operating cash flow
- Unstable dividend track record
- High level of non-cash earnings
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 20 to 23
Target: 33 ( 50% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 8th company in the Series of Best Stocks Below Rs. 50. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss