Analysts highlighted its chart patterns suggesting potential for significant upside.

Shares of Indian Railway Finance Corporation (IRFC) gained over 10% in the last five trading sessions, making it one of the top-performing PSU stocks on investor watchlists. 

The rally came on the back of strong technical signals and renewed optimism around India’s ongoing railway capex cycle.

Prameela Balakkala, SEBI-registered advisor on Stocktwits, identified IRFC as a fundamentally sound and technically promising public sector stock. 

She emphasized the company’s monopoly as the dedicated financier for Indian Railways, backed by a 100% government guarantee and stable long-term lease cash flows. 

IRFC also offers a high dividend yield, solid margins, and remains undervalued with a P/E ratio of 8.9, making it attractive for long-term investors.

On the technical front, Prameela pointed out that the stock’s Relative Strength Index (RSI) rose to 53.2, coupled with increasing volumes—signs of accumulation. 

IRFC also traded above both its 20-day and 50-day EMAs on daily charts, signaling a near-term bullish bias. On the weekly chart, the stock hovered near the 20-week EMA, which she viewed as a potential launchpad for a mid-term rally.

She pegged ₹100–₹95 as a strong institutional accumulation zone, and said a breakout above ₹130 (backed by volume) could lead to a sharp rally towards ₹165–₹180, with a longer-term target of ₹200–₹230, offering up to 80% upside.

Meanwhile, technical analyst Anupam Bajpai focused on breakout signals. 

He noted that IRFC had recently closed above the key ₹126 resistance following a rounding bottom pattern, supported by strong volume. 

He viewed this as a classic reversal setup, especially after the stock had previously breached the lower Bollinger Band.

Bajpai projected an immediate target of ₹136, with ₹126 now acting as a crucial support level. 

The stock’s close above its 20-day Moving Average and 50-day Exponential Moving Average reinforced the bullish sentiment.

With India’s rail infrastructure push—including the bullet train project and electrification drive—acting as tailwinds, analysts believe IRFC could see sustained gains over the next few months. 

IRFC shares have fallen 13% year-to-date (YTD).

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