As IRFC shares sink 50% from peak, why scaling crucial resistance could be a tall order?

Shares of Indian Railway Finance Corporation (IRFC) remain off track despite double-digit growth in Q1 net profit. The stock has fallen 3% since the results, extending a broader downtrend — 30% over the past year and nearly 50% from its 52-week high. Technical charts point to a weak setup, with the recent slip below the crucial Rs 130 mark turning it into a stiff resistance. Experts caution that reclaiming this level could be a tall order for the railway PSU stock.

IRFC's underperformance has ensured that the stock trades below its 50-day and 200-day simple moving averages (SMAs) of Rs 134.3 and Rs 136.4, respectively.

Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking said that IRFC shares are currently trading in an oversold territory and he sees the chart structure largely weak. While the stock finds support at Rs 124 while the resistance at Rs 130.

Echoing similar sentiments, Anuj Gupta, Director at Ya Wealth Global Research said that the overall trend of IRFC is looking weak and stock is looking down. Gupta said that only if the stock is able to sustain above 130 levels, a fresh buying would happen for the targets of Rs 138 and next target is Rs 145 levels.

IRFC reported a net profit of Rs 1,746 crore versus Rs 1,577 crore in the year ago period. The total revenue from operations stood at Rs 6,915 crore, rising 2% over Rs 6,766 crore in the corresponding quarter of the last financial year.

Also Read: IRFC Q1 Results: PAT rises 11% YoY to Rs 1,746 crore; co hits highs in quarterly profit, income

IRFC has breached the previous a stop loss of Rs 130 suggested by analyst Drumil Vithlani, Technical Research Analyst who had recommended investors to avoid fresh long positions

IRFC, which is the dedicated financing arm of the Indian Railways for mobilising funds from domestic as well as overseas capital markets, had a lackluster Q4FY25 earnings. The company had reported a net profit of Rs 1,682 crore which was a decline of 2% over Rs 1,717 crore in the year ago period.

Also Read: Rekha Jhunjhunwala portfolio: 12 stocks log double-digit gains, 1 microcap shines with 43% return in FY26 so far

IRFC’s underperformance mirrors the lacklustre trend across railway stocks, once considered the darlings of retail investors. Stocks like Rail Vikas Nigam Limited (RVNL), Indian Railway Catering And Tourism Corporation (IRCTC), Titagarh Rail Systems, Jupiter Wagons, RITES and Container Corporation of India (CONCOR) have plunged between 22% and 43% over a one year period, hinting at a bear stranglehold.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)