Indian Railway Finance Corporation (IRFC) shares have delivered incredible returns over the last year. The stock hit an all-time high of ₹229 in July 2024 but has since cooled off. The stock is currently down by nearly 32% from its July peak.
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Anshul Jain, the Head of Research at Lakshmishree, recently asked short-term investors to exit IRFC and book profits. Now, another analyst has come out singing a similar tune. Market expert Shivangi Sarda also asks investors to exit the Indian railway stock, highlighting the three consecutive weeks of dips. Sarda says the momentum is missing, and there are a lot of opportunity costs with such sectors.
Why Is IRFC Falling?
The Indian railway stock is a Public Sector Undertaking (PSU) stock. A substantial number of PSU stocks, primarily from the defense and railway sectors, took a hit over the last day.
According to Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, “The PSU basket has seen a remarkable rally in recent years, and many stocks are now undergoing a natural correction. This is likely to continue for some time.“
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According to some analysts, the sharp decline in IRFC and other PSU stocks could be due to their high valuations.
Will The Stock Regain Its Momentum?
Although the current dip might carry on for a few more days, there is a high probability that IRFC will regain its momentum in the long term.
Anshul Jain further said that while the short-term outlook has changed, the long-term prospects for IRFC remain solid.
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The PSU sector may begin an upward movement once it stabilizes. The entire sector faces a correction as only four stocks of the 59 PSU index stocks were trading higher yesterday.
