IRFC – A Zero NPA NBFC

Discussion Topic: Evaluating the Future of IRFC Amid Stagnant Profits and Limited Growth Prospects

Hello IRFC Community,

I’ve been closely following IRFC’s quarterly results, and it seems that profits have been stagnant over the last two years. Additionally, during the last earnings call, management mentioned that the government has already allocated most of the Railway capex in the budget for the next 2-3 years, reducing the need for extra-budgetary resources. This could potentially limit IRFC’s growth in funding railway projects.

Given this context, I’m concerned that there might not be much room for EPS growth in the near future. The market price seems to reflect an optimistic outlook, but with the current lack of growth catalysts, I’m wondering if the stock might be overvalued at this point.

My Questions to the Community:

1. Stagnant Profits and EPS: What are your thoughts on the stagnation in IRFC’s profits and EPS over the last couple of years? Do you see any potential triggers that could drive growth in the near future, or do you agree that the stock might be overvalued given the current outlook?

2. Impact of Limited Government Capex: With the government already allocating most of the Railway capex in the budget, reducing the need for IRFC’s extra-budgetary funding, how do you think this will impact IRFC’s business model and profitability in the next few years?

3. Long-Term Viability: Despite the current challenges, do you believe IRFC has a viable long-term strategy to adapt and grow, or should investors be cautious given the potential limitations in funding and growth?

Looking forward to hearing your insights and opinions on whether IRFC can navigate these challenges or if the current valuation might be too high given the stagnation in growth.

Thank you!