Financial modeling &

Valuation
Deepak singh

Deepak singh
 TABLE OF CONTENT
ONE PAGE PROFILE

HISTORICAL FINANCIALS

FORECASTING

RATION ANALYSIS

COMMON SIZE STATEMENT

RELATIVE VALUATON

WACC

INTRINSIC GROWTH

TERMINAL VALUE

SENSITIVITY ANALYSIS

DUPONT ANALYSIS

VALUE AT RISK

HISTORICAL APPROACH

MONTE CARLO SIMULATION

DAILY RETURN DISTRIBUTION

 INDIAN RAILWAY FINANCE CORPORATION LTD - One Page Profile
Incorporated in 1986, Indian Railway Finance Corporation borrows funds from the financial markets to finance the
acquisition / creation of assets which are then leased out to the Indian Railways as finance lease Company is a funding
arm of the Indian Railways for mobilizing funds from domestic and overseas Capital Markets. IRFC is a Mini Ratna I and
Schedule A Public Sector Enterprise under the admin control of Ministry of Railways, Govt. of India. It is also registered as
Systemically Important Non–Deposit taking NBFC and Infrastructure Finance Company.

Key Financial Metrics Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Share Price 4 Year
Total Sales 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4 210
Sales Growth (y-o-y) 20.55% 17.51% 28.72% 17.70% 11.52% 190
170
Gross Profit Margins (%) 99.94% 99.93% 99.93% 99.93% 99.96% 150
EBITDA Margins (%) 99.51% 99.29% 99.41% 99.61% 99.54% 130
110
EBIT Margins (%) 99.51% 99.26% 99.34% 99.55% 99.51% 90
Net Profit Margins (%) 23.79% 28.00% 30.00% 26.52% 24.06% 70
50
Earning per Share (Rs) 2.4 3.4 4.7 4.8 4.9 30
EPS Growth(y-o-y) 41.57% 38.34% 37.90% 4.06% 1.18% 10
Dividend per Share - 1.05 1.40 1.50 1.50
DPS Growth (y-o-y) -100.00% - 33.33% 7.14% 0.00%

Key Financial Ratios Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Volume chart
Price to Earnings 6.8x 4.6x 5.5x 35.9x 700m
EV/EBITDA 24.2x 600m
EV/Sales 24.1x 500m
400m
Return on Equity 7.46% 8.65% 10.33% 9.61% 8.92%
300m
Return on Capital Employeed 5.05% 4.36% 4.70% 5.12% 5.75% 200m
Return on Asset 1.32% 1.35% 1.47% 1.35% 1.31% 100m
Interest Coverage Ratio 131.41% 139.30% 143.27% 136.32% 131.90% 0m
CFO/Sales -4.67 -5.70 -3.19 -1.21 0.30

Shareholding Pattern No. of Shares in (Cr) Holding % Market Value in (Cr) GOVERNMENT &
86.36%
Promotors

President of India (MoR) 1,129 86.36% 198641 PUBLIC 11.68%

DII 12 0.89% 2047

DII 0.89%

FII 14 1.08% 2484

FII 1.08%

PUBLIC 153 11.68% 26868

Managerial Remuneration Designation Remuneration (mn) Capital Structure

Ms. Shelly Verma (addl. Charge ) CEO, and Director (fin). 8.84 Share Price as On June 2024 176
No. of Shares o/s 1307
Company Concall Transcript Market Capitalization 230040.7
Less : Cash & Equivalents (467)
Future Growth and Strategy: Less : Total Debt 412038.51
Exploring funding opportunities beyond Indian Railways with backward and forward linkages.
Enterprise Value 641612.40
Actively looking at funding projects in the railway ecosystem and collaborating with other infrastructure
lenders.
Compounded Profit Growth
Strengthening internal mechanisms to assess and diversify business opportunities.
10 Years: 25%
Board has recommended a final dividend of INR 0.70 per equity share for FY '24. 5 Years: 23%
Challenges and Opportunities:
3 Years: 13%
Need to diversify funding sources as extra budgetary resources from Indian Railways are reducing.
TTM: 1%
Looking at forward and backward linkages for growth opportunities.
Planning to execute lease agreements for projects funded in previous years to boost revenue.
Exploring refinancing opportunities to manage committed liabilities and disbursements. Return on Equity
Market Borrowing Plan:
Approval for borrowing INR 50,000 crores based on interim budget, subject to final budget approval. 10 Years: 13%
Funds to be used for disbursements, committed liabilities, and refinancing. 5 Years: 14%
Exploring opportunities to refinance existing debt and manage liquidity effectively. 3 Years: 15%
Last Year: 14%
 INDIAN RAILWAY FINANCE CORPORATION LTD
# Income statement - INDIAN RAILWAY FINANCE CORPORATION LTD
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Revenue 6,939.2 7,506.7 9,047.4 9,267.1 11,133.6 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4
Revenue Growth % 8.18% 20.52% 2.43% 20.14% 20.55% 17.51% 28.72% 17.70% 11.52%

COGS 3.1 4.1 3.0 5.5 6.5 8.6 10.6 15.1 17.2 11.2
COGS % Sales 0.04% 0.05% 0.03% 0.06% 0.06% 0.06% 0.07% 0.07% 0.07% 0.04%

Gross Profit 6,936.1 7,502.6 9,044.4 9,261.6 11,127.1 13,412.4 15,759.9 20,284.3 23,874.8 26,634.2
Gross Margin 99.96% 99.95% 99.97% 99.94% 99.94% 99.94% 99.93% 99.93% 99.93% 99.96%

Selling & Admin Expenses 30.4 33.9 22.7 32.2 41.8 57.0 102.4 107.4 116.9 121.7
SG&A % sales 0.44% 0.45% 0.25% 0.35% 0.38% 0.42% 0.65% 0.53% 0.49% 0.46%
Other Incomes 0.97 0.61 0.26 1.23 -0.02 0.06 0.33 2.22 40.66 10.56

EBITDA 6,906.7 7,469.3 9,022.0 9,230.7 11,085.3 13,355.5 15,657.9 20,179.2 23,798.5 26,523.0
EBITDA Margin 99.53% 99.50% 99.72% 99.61% 99.57% 99.51% 99.29% 99.41% 99.61% 99.54%

Depriciation 0.4 0.4 0.4 0.4 0.4 0.5 4.4 14.0 14.1 9.4
Depriciation % sales 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.03% 0.07% 0.06% 0.04%

EBIT 6,906.2 7,469.0 9,021.6 9,230.3 11,084.9 13,355.1 15,653.4 20,165.1 23,784.5 26,513.6
EBIT Margin 99.52% 99.50% 99.72% 99.60% 99.56% 99.51% 99.26% 99.34% 99.55% 99.51%

Interest 4,991.8 5,518.8 6,888.1 6,637.6 8,183.1 10,162.7 11,237.1 14,074.8 17,447.2 20,101.5
Interest % sales 71.94% 73.52% 76.13% 71.63% 73.50% 75.72% 71.25% 69.34% 73.03% 75.44%

EBT 1,914.4 1,950.1 2,133.5 2,592.7 2,901.8 3,192.4 4,416.4 6,090.4 6,337.3 6,412.1
EBT % sales 27.59% 25.98% 23.58% 27.98% 26.06% 23.79% 28.00% 30.00% 26.52% 24.06%

Tax 1,155.9 1,101.2 1,199.5 537.8 646.8 - - 0.3 - -

Tax % sales 16.66% 14.67% 13.26% 5.80% 5.81% 0.00% 0.00% 0.00% 0.00% 0.00%

Net Profit 758.5 848.9 934.0 2,054.9 2,255.0 3,192.4 4,416.4 6,090.0 6,337.3 6,412.1
Net Margin 10.93% 11.31% 10.32% 22.17% 20.25% 23.79% 28.00% 30.00% 26.52% 24.06%

No. of Equity Shares 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85 1,306.85

Earning per Share 0.6 0.6 0.7 1.6 1.7 2.4 3.4 4.7 4.8 4.9
EPS Growth 11.92% 10.03% 120.00% 9.74% 41.57% 38.34% 37.90% 4.06% 1.18%

Dividend per Share 0.12 0.26 0.29 0.29 0.31 - 1.05 1.40 1.50 1.50

Dividend Payout Ratio 20.03% 39.99% 39.97% 18.26% 17.72% 0.00% 31.07% 30.04% 30.93% 30.57%

Retained Earnings 79.97% 60.01% 60.03% 81.74% 82.28% 100.00% 68.93% 69.96% 69.07% 69.43%

# Balance Sheet - INDIAN RAILWAY FINANCE CORPORATION LTD

Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Equity Share Capital 3,584.0 4,526.5 6,526.5 6,526.5 9,380.5 11,880.5 13,068.5 13,068.5 13,068.5 13,068.5
Reserves 5,097.7 6,998.9 5,483.1 7,402.2 15,648.2 18,419.3 22,844.9 27,927.8 32,401.8 36,110.1
Borrowings 71,269.6 87,503.2 1,06,394.9 1,34,005.5 1,73,932.7 2,34,376.7 3,23,145.3 3,88,440.0 4,18,934.9 4,12,038.5
Other Liabilities 7,695.8 9,371.9 11,245.2 13,534.1 7,642.3 10,827.7 21,422.9 20,543.9 26,741.5 23,849.7
Total Liabilities 87,647.0 1,08,400.4 1,29,649.6 1,61,468.3 2,06,603.6 2,75,504.1 3,80,481.5 4,49,980.2 4,91,146.7 4,85,066.8

Fixed Assets Net block 12.0 11.8 11.5 11.3 11.3 11.1 45.4 38.0 19.2 25.8
Capital Work in Progress - - - - - - - - - -
Investments 9.3 7.9 7.9 14.0 13.2 11.5 12.0 10.0 13.7 53.6
Other Assets 87,625.7 1,08,380.8 1,29,630.2 1,61,443.1 2,06,579.2 2,75,481.6 3,80,424.2 4,49,932.3 4,91,113.9 4,84,987.4
Total Non-Current Assets 87641.92 107189.18 129642.11 161368.5 206522.54 275403.37 380022.6 248984.34 246458.07 484600.01

Receivables - - - - - - - 2,00,692.5 2,44,147.0 -

Inventory - - - - - - - - - -
Cash & Bank 5.1 1,211.2 7.5 99.8 81.1 100.8 458.9 303.4 541.7 466.8
Total Current Assets 5.07 1211.21 7.52 99.82 81.07 100.76 458.92 200995.88 244688.67 466.77
Total Assets 87,647.0 1,08,400.4 1,29,649.6 1,61,468.3 2,06,603.6 2,75,504.1 3,80,481.5 4,49,980.2 4,91,146.7 4,85,066.8

Check TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE
# Cash Flow Statement - INDIAN RAILWAY FINANCE CORPORATION LTD
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Operating Activities
Profit from operations - 2,026.0 2,442.0 2,748.0 3,044.0 3,182.0 4,150.0 6,218.0 6,451.0 6,549.0
Receivables - - - (11,265.0) (15,555.0) (23,553.0) (16,989.0) (35,124.0) (43,455.0) (16,334.0)
Payables - - - 5.0 3.0 26.0 13.0 (26.0) (11.0) 3.0
Loans Advances - (7,769.0) (13,680.0) (14,787.0) (658.0) (528.0) (546.0) 145.0 892.0 989.0
Other WC items - (10,170.0) (7,771.0) (4,223.0) (27,964.0) (41,237.0) (76,230.0) (35,921.0) 7,270.0 16,683.0
Working capital changes - - - - - - - - - -
Direct taxes - (464.0) (447.0) (553.0) (619.0) (589.0) (304.0) - - 24.0
Cash from Operating Activities - 0 -16,377 -19,456 -28,075 -41,749 -62,699 -89,906 -64,708 -28,853 7,914

Investing Activities
Fixed assets purchased - (0.1) (0.1) (0.2) (0.4) (0.2) (0.9) (6.6) (0.8) (8.3)
Fixed assets sold - 0.0 0.0 0.0 0.0 0.0 0.0 - 0.0 0.0
Investments sold - - - 1.3 1.2 1.1 1.0 0.9 0.3 -
Dividends received - 0.5 0.5 0.5 0.5 0.6 0.3 1.0 0.6 0.8
Other investing items - 1.6 1.5 - - - - - - -
Cash from Investing Activities - 1.9 1.8 1.7 1.3 1.5 0.4 (4.7) 0.1 (7.5)

Financing Activities
Proceeds from shares - 400.0 - - 2,854.0 2,500.0 3,089.0 - - 6.0
Proceeds from debentures - 19,204.0 17,920.0 20,742.0 10,466.0 30,813.0 24,249.0 18,483.0 21,906.0 9,000.0
Redemption of debentures - (482.0) (3,726.0) - - - - - - -
Proceeds from borrowings - 10,750.0 25,830.0 12,585.0 27,017.0 29,642.0 65,778.0 49,731.0 8,620.0 -
Repayment of borrowings - (13,354.0) (21,580.0) - - - (1,017.0) (2,929.0) - (15,041.0)
Dividends paid - (182.0) (668.0) (234.0) (375.0) (200.0) (1,872.0) (1,006.0) (1,869.0) (1,960.0)
Financial liabilities - - - - - - (4.0) (13.0) (13.0) (14.0)
Share application money - 2,000.0 - - - - - - - -
Other financing items - (754.0) 474.0 (5,019.0) 1,788.0 (58.0) (21.0) - - (37.0)
Cash from Financing Activity - - 17,582.0 18,250.0 28,074.0 41,750.0 62,697.0 90,202.0 64,266.0 28,644.0 (8,046.0)

Net Cash Flow 0.0 1,206.9 -1,204.2 0.7 2.3 -0.5 296.4 -446.7 -208.9 -139.5
 Forcating - INDIAN RAILWAY FINANCE CORPORATION LTD

Year Weight Year Sales Sales Growth Year Weight Year EBITDA EBITDA Growth
1 2015A 6,939.2 1 2015A 6,906.7
2 2016A 7,506.7 8.18% 2 2016A 7,469.3 8.15%
3 2017A 9,047.4 20.52% 3 2017A 9,022.0 20.79%
4 2018A 9,267.1 2.43% 4 2018A 9,230.7 2.31%
5 2019A 11,133.6 20.14% 5 2019A 11,085.3 20.09%
6 2020A 13,421.0 20.55% 6 2020A 13,355.5 20.48%
7 2021A 15,770.5 17.51% 7 2021A 15,657.9 17.24%
8 2022A 20,299.4 28.72% 8 2022A 20,179.2 28.88%
9 2023A 23,892.0 17.70% 9 2023A 23,798.5 17.94%
10 2024A 26,645.4 11.52% 10 2024A 26,523.0 11.45%
11 2025E 26,729.2 0.31% 11 2025 E 26,595.8 0.27%
12 2026E 28,972.3 8.39% 12 2026 E 28,827.2 8.39%
13 2027E 31,215.4 7.74% 13 2027 E 31,058.7 7.74%
14 2028E 33,458.5 7.19% 14 2028 E 33,290.1 7.18%
15 2029E 35,701.6 6.70% 15 2029 E 35,521.6 6.70%
Sales EBITDA
40,000.0 40,000.0

35,000.0 35,000.0

30,000.0 30,000.0

25,000.0 25,000.0

20,000.0 20,000.0
15,000.0 15,000.0
10,000.0 10,000.0
5,000.0 5,000.0
0.0 0.0
2015A

2016A

2017A

2018A

2019A

2020A

2021A

2022A

2023A

2024A

2025E

2026E

2027E

2028E

2029E

Year Weight Year Net Profit Sales Growth Year Weight Year E/share EBITDA Growth
1 2015A 758.5 1 2015A 0.6
2 2016A 848.9 11.92% 2 2016A 0.6 11.92%
3 2017A 934.0 10.03% 3 2017A 0.7 10.03%
4 2018A 2,054.9 120.00% 4 2018A 1.6 120.00%
5 2019A 2,255.0 9.74% 5 2019A 1.7 9.74%
6 2020A 3,192.4 41.57% 6 2020A 2.4 41.57%
7 2021A 4,416.4 38.34% 7 2021A 3.4 38.34%
8 2022A 6,090.0 37.90% 8 2022A 4.7 37.90%
9 2023A 6,337.3 4.06% 9 2023A 4.8 4.06%
10 2024A 6,412.1 1.18% 10 2024A 4.9 1.18%
11 2025E 7,433.4 15.93% 11 2025 E 5.7 15.93%
12 2026E 8,179.4 10.04% 12 2026 E 6.3 10.04%
13 2027E 8,925.5 9.12% 13 2027 E 6.8 9.12%
14 2028E 9,671.6 8.36% 14 2028 E 7.4 8.36%
15 2029E 10,417.7 7.71% 15 2029 E 8.0 7.71%

Net Profit Earning per Share

12,000.0 9.0
8.0
10,000.0
7.0
8,000.0 6.0
5.0
6,000.0
4.0
4,000.0 3.0
2.0
2,000.0
1.0
0.0 0.0
2015A

2016A

2017A

2018A

2019A

2020A

2021A

2022A

2023A

2024A

2025E

2026E

2027E

2028E

2029E
 RATIO ANALYSIS - INDIAN RAILWAY FINANCE CORPORATION LTD
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Sales Growth 8.18% 20.52% 2.43% 20.14% 20.55% 17.51% 28.72% 17.70% 11.52%
EBITDA Growth 8.15% 20.79% 2.31% 20.09% 20.48% 17.24% 28.88% 17.94% 11.45%
EBIT Growth 8.15% 20.79% 2.31% 20.09% 20.48% 17.21% 28.82% 17.95% 11.47%
Net Profit Growth 11.92% 10.03% 120.00% 9.74% 41.57% 38.34% 37.90% 4.06% 1.18%

Gross Margin 99.96% 99.95% 99.97% 99.94% 99.94% 99.94% 99.93% 99.93% 99.93% 99.96%
EBITDA Margin 99.53% 99.50% 99.72% 99.61% 99.57% 99.51% 99.29% 99.41% 99.61% 99.54%
EBIT Margin 99.52% 99.50% 99.72% 99.60% 99.56% 99.51% 99.26% 99.34% 99.55% 99.51%
EBT Margin 27.59% 25.98% 23.58% 27.98% 26.06% 23.79% 28.00% 30.00% 26.52% 24.06%
Net Profit Margin 10.93% 11.31% 10.32% 22.17% 20.25% 23.79% 28.00% 30.00% 26.52% 24.06%

ROCE 8.64% 7.54% 7.62% 6.24% 5.57% 5.05% 4.36% 4.70% 5.12% 5.75%
Retained Earnings 79.97% 60.01% 60.03% 81.74% 82.28% 100.00% 68.93% 69.96% 69.07% 69.43%
Return on Equity 8.74% 7.37% 7.78% 14.75% 9.01% 10.54% 12.30% 14.86% 13.94% 13.04%
Self Sustained Growth 6.99% 4.42% 4.67% 12.06% 7.41% 10.54% 8.48% 10.39% 9.63% 9.05%
Interest Coverage Ratio 1.38x 1.35x 1.31x 1.39x 1.35x 1.31x 1.39x 1.43x 1.36x 1.32x

Debtor Turnover Ratio 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.10x 0.10x 0.00x
Credit Turnover Ratio 0.90x 0.80x 0.80x 0.68x 1.46x 1.24x 0.74x 0.99x 0.89x 1.12x
Inventory Turnover Ratio 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x 0.00x
Fixed Asset Turnover Ratio 577.78x 638.32x 785.36x 820.83x 987.02x 1214.57x 347.67x 534.76x 1245.02x 1031.57x
Capital Turnover Ratio 0.80x 0.65x 0.75x 0.67x 0.44x 0.44x 0.44x 0.50x 0.53x 0.54x

Debtor Days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 3609 days 3730 days 0 days
Payable Days 405 days 456 days 454 days 533 days 251 days 294 days 496 days 369 days 409 days 327 days
Inventory Days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days
Cash Conversion Cycle -405 days -456 days -454 days -533 days -251 days -294 days -496 days 3239 days 3321 days -327 days

CFO/Sales 0.00 -2.18 -2.15 -3.03 -3.75 -4.67 -5.70 -3.19 -1.21 0.30
CFO/Total Assets 0.00 -0.15 -0.15 -0.17 -0.20 -0.23 -0.24 -0.14 -0.06 0.02
CFO/Total Debt 0.00 -0.19 -0.18 -0.21 -0.24 -0.27 -0.28 -0.17 -0.07 0.02
 Common Sizing Statements
Common Size Income Statement - INDIAN RAILWAY FINANCE CORPORATION LTD
Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Raw Material Cost 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Change in Inventory 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Power and Fuel 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Other Mfr. Exp 0.00% 0.00% 0.00% 0.00% 0.00% 0.02% 0.02% 0.02% 0.02% 0.00%
Employee Cost 0.04% 0.05% 0.03% 0.06% 0.06% 0.05% 0.05% 0.05% 0.06% 0.04%
Selling and admin 0.43% 0.44% 0.24% 0.07% 0.04% 0.03% 0.03% 0.03% 0.03% 0.00%
Other Expenses 0.01% 0.01% 0.01% 0.27% 0.33% 0.39% 0.62% 0.50% 0.46% 0.46%
Other Income 0.01% 0.01% 0.00% 0.01% 0.00% 0.00% 0.00% 0.01% 0.17% 0.04%
Depreciation 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.03% 0.07% 0.06% 0.04%
Interest 71.94% 73.52% 76.13% 71.63% 73.50% 75.72% 71.25% 69.34% 73.03% 75.44%
Profit before tax 27.59% 25.98% 23.58% 27.98% 26.06% 23.78% 28.00% 30.00% 26.52% 24.06%
Tax 16.66% 14.67% 13.26% 5.80% 5.81% 0.00% 0.00% 0.00% 0.00% 0.00%
Net profit 10.93% 11.31% 10.32% 22.17% 20.25% 23.78% 28.00% 30.00% 26.52% 24.06%
Dividend Amount 2.19% 4.52% 4.13% 4.05% 3.59% 0.00% 8.70% 9.01% 8.20% 7.36%

Common Size Balance Sheet - INDIAN RAILWAY FINANCE CORPORATION LTD

Particulars Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Total Liabilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Equity Share Capital 4.09% 4.18% 5.03% 4.04% 4.54% 4.31% 3.43% 2.90% 2.66% 2.69%
Reserves 5.82% 6.46% 4.23% 4.58% 7.57% 6.69% 6.00% 6.21% 6.60% 7.44%
Borrowings 81.31% 80.72% 82.06% 82.99% 84.19% 85.07% 84.93% 86.32% 85.30% 84.94%
Other Liabilities 8.78% 8.65% 8.67% 8.38% 3.70% 3.93% 5.63% 4.57% 5.44% 4.92%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Net Block 0.01% 0.01% 0.01% 0.01% 0.01% 0.00% 0.01% 0.01% 0.00% 0.01%
Capital Work in Progress 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Investments 0.01% 0.01% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.01%
Other Assets 99.98% 99.98% 99.99% 99.98% 99.99% 99.99% 99.98% 99.99% 99.99% 99.98%
Receivables 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 44.60% 49.71% 0.00%
Inventory 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Cash & Bank 0.01% 1.12% 0.01% 0.06% 0.04% 0.04% 0.12% 0.07% 0.11% 0.10%
 COMPARABLE COMPANY VALUATION - INDIAN RAILWAY FINANCE CORPORATION LTD
Amount in Crores

Market Data Financials Valuation

Share Shares Enterprise Net
Company Ticker Price Outstanding Equity Value Net Debt Value Revenue EBITDA Income EV/Revenue EV/EBITDA P/E
IRFC 176 1,307 2,30,424 4,12,039 6,42,462 26,645 26,537 6,412 24.1 x 24.2 x 35.9 x
Power Fin.Corpn. 482 330 1,59,164 8,61,961 10,21,125 91,097 91,910 26,461 11.2 x 11.1 x 6.0 x
REC Ltd 511 263 1,34,425 4,45,568 5,79,992 47,505 48,132 14,145 12.2 x 12.1 x 9.5 x
Indian Renewable 188 269 50,407 49,687 1,00,094 4,965 4,916 1,252 20.2 x 20.4 x 40.3 x
IFCI 61 261 15,990 5,367 21,357 1,987 1,835 241 10.8 x 11.6 x 66.3 x
Tour. Fin. Corp. 191 9 1,772 978 2,750 242 218 91 11.4 x 12.6 x 19.4 x
Guj. State Fin. 26 9 230 662 891 18 19 (119) 50.5 x 48.1 x -1.9 x
High 50.5 x 48.1 x 66.3 x
75th Percentile 10.8 x 11.1 x -1.9 x
Average 20.0 x 20.0 x 25.1 x
Median 12.2 x 12.6 x 19.4 x
25th percentile 11.3 x 11.8 x 7.8 x
Low 10.8 x 11.1 x -1.9 x
Comparable Valuation INDIAN RAILWAY FINANCE CORPORATION LTD EV/Revenue EV/EBITDA P/E
Implied Enterprise Value 3,25,317 3,34,898 (2,87,323)
Net Debt 4,12,039 4,12,039 4,12,039
Implied Market Value (86,721) (77,141) 1,24,715
Shares Outstanding 1,307 1,307 1,307
Implied Value per Share (66) (59) 95
Source : Screener.in
Overvalued Overvalued Overvalued
 Weighted Average Cost of Capital

All figures are in cr unless stated otherwise

Peer Companies

Debt/ Debt/ Levered /Unlevered/

Name of the Company Country Total Debt Total Equity Tax Rate Equity Capital Beta2 Beta2
IRFC India 412038.5 230423.8 30.00% 178.82% 64.13% 1.54 0.68
Power Fin.Corpn. India 861961.1 159163.8 30.00% 541.56% 84.41% 1.62 0.34
REC Ltd India 445567.5 134424.9 30.00% 331.46% 76.82% 1.09 0.33
Indian Renewable India 49686.9 50407.0 30.00% 98.57% 49.64% 0.00 0.00
IFCI India 5367.0 15990.0 30.00% 33.56% 25.13% 1.88 1.52
Tour. Fin. Corp. India 977.7 1772.1 30.00% 55.17% 35.55% 2.03 1.46
Guj. State Fin. India 661.7 229.5 30.00% 288.29% 74.25% 1.34 0.44

Average 30.00% 218.20% 58.56% 1.36 0.68

Median 30.00% 178.82% 64.13% 1.54 0.44

Cost of Debt Cost of Equity

Pre- Tax Cost of Debt 9.72% Risk Free Rate 7.39%
Tax Rate 30.00% Equity Risk Premium 15.41%
After-Tax Cost of Debt 6.80% Levered Beta 0.65
Cost of Equity 17.43%

Levered Beta
Comps Median Unlevered Beta 0.44
Capital Structure Target Debt to Equity 66.67%
Current Targeted Tax Rate 30.00%
Total Debt 412038.5 64.13% 40.00% Levered Beta 0.65
Market Capitalization 230423.8 35.87% 60.00%
642462.3 100.00% 100.00%
Weighted Average Cost of Capital
Debt / Equity 178.82% 66.67%
Cost of Equity 17.43%
Equity Weight 60.00%

Cost of Debt 6.80%

Debt Weight 40.00%
13.18%
 Reinvestment Rate Calculation
Calculation of ROIC Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
# Current Assets
Trade receivables 0 0 2,00,692 2,44,147 0
Cash Equivalents 101 459 303 542 467
Short term loans 0 0 1 1 0
Other asset items 2,75,380 3,79,965 2,48,936 2,46,424 4,84,521
Total Current Assets 2,75,481.0 3,80,424.0 4,49,932.0 4,91,114.0 4,84,988.0

# Current Liabilities
Trade Payables 0 0 0 0 0
Other liability items 10,828 21,423 20,544 26,742 23,850
Total Current Liabilities 10,828.0 21,423.0 20,544.0 26,742.0 23,850.0

# Net Working Capital 2,64,653.0 3,59,001.0 4,29,388.0 4,64,372.0 4,61,138.0

# Non - Curren Assets

Building 11.2 11.2 48.3 36.4 -
Equipments 0.2 0.4 0.9 1.3 -
Computers 0.3 0.4 1.1 1.2 -
Furniture n fittings 0.1 0.2 1.0 1.2 -
Vehicles 0.3 0.3 0.4 0.4 -
Intangible Assets - - - - 4.8
Other fixed assets 0.1 34.5 2.0 2.0 -
Gross Block 12.2 47.0 53.6 42.4 4.8
Accumulated Depriciation 1.2 1.6 15.6 23.2 -
# Net Block 13.4 48.6 69.2 65.6 4.8

# Invested Capital 2,64,666.4 3,59,049.6 4,29,457.2 4,64,437.6 4,61,142.8

EBIT 13,355.1 15,653.4 20,165.1 23,784.5 26,513.6

# ROIC 5.05% 4.36% 4.70% 5.12% 5.75%

# Calculation of Reinvestment Rate Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Net Capex 0.2 0.8 6.6 0.8 8.3

Change in Working Capital 94,348.0 70,387.0 34,984.0 (3,234.0)

EBIT 13,355.1 15,653.4 20,165.1 23,784.5 26,513.6

Marginal Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 10,016.3 11,740.1 15,123.9 17,838.3 19,885.2

Reinvestment 94,348.8 70,393.6 34,984.8 (3,225.7)

Reinvestment Rate 803.65% 465.45% 196.12% -16.22%

4 Year Average 362.25%

4 Year Median 330.78%

# Calculation of Growth Rate Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Reinvestment Rate 803.65% 465.45% 196.12% -16.22%

ROIC 4.36% 4.70% 5.12% 5.75%
Intrinsic Growth Rate 35.04% 21.86% 10.04% -0.93%

4 Year Average 16.50%

4 Year Median 15.95%
Calculation of PV of FCFF Mar-24A Mar-25E Mar-26E Mar-27E Mar-28E Mar-29E
EBIT 26,513.6 32,015.1 38,658.3 46,679.9 56,366.0 68,061.9
Tax Rate] 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 19,885.19 24,011.36 28,993.72 35,009.91 42,274.47 51,046.43
Less : Reinvestment Rate 330.78% 330.78% 330.78% 330.78% 330.78% 330.78%
Free Cash Flow to Firm (FCFF) -45,891.9 -55,414.5 -66,913.0 -80,797.4 -97,562.9 -1,17,807.2
Mid Year Convension 0.5 1.5 2.5 3.5 4.5
Discounting Factor 0.940 0.831 0.734 0.648 0.573
PV of FCFF -52,089.0 -55,574.8 -59,293.9 -63,261.9 -67,495.5

Expected Growth 20.75%

Terminal Growth 5.60%
WACC 13.18%

Calculation of Terminal Value Sensitivity Analysis

-1365.91 18.00% 20.00% 13.18% 24.00%
FCFF (n+1) -142252.169 3.00% -958.5 -909.6 -1,155.6 -839.7
WACC 13.18% 4.00% -988.2 -932.5 -1,222.4 -854.6
Terminal Growth Rate 5.60% 5.60% -1,045.7 -975.8 -1,365.9 -881.7
6.50% -1,085.0 -1,004.7 -1,476.9 -899.1
Terminal Value -1877632.45 7.00% -1,109.7 -1,022.5 -1,552.5 -909.6

Calculation of Equity Value per Share

PV of FCFF -297715.1252
PV of Terminal Value -1075755.4
Value of Operating Assets -1373470.526

Add :Cash 466.77

Less : Debt 412038.51
Value of Equity -1785042.266
No of Shares 1,306.85
Equity Value per Share -1,365.91
 INDIAN RAILWAY FINANCE CORPORATION LTD
IFRC | BSE Code : 543257
INR - 176
52 Week ( High / Low - 200.0 /32.0 || NSE: IFRC

About the Company

Incorporated in 1986, Indian Railway Finance Corporation borrows funds from the financial markets to finance the
acquisition / creation of assets which are then leased out to the Indian Railways as finance lease. Company is a funding arm
of the Indian Railways for mobilizing funds from domestic and overseas Capital Markets. IRFC is a Mini
Ratna I and Schedule A Public Sector Enterprise under the admin control of Ministry of Railways, Govt. of India. It is also
registered as Systemically Important Non–Deposit taking NBFC and Infrastructure Finance Company.

Financial Summaary

Revenue (INR CRs) Net Profit (INR CRs) Total Asset (INR CRs)

6,337 6,412
26,645 6,090
23,892 4,88,107
4,70,563
20,299 4,15,231
4,416
15,771 3,27,993

2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024

Return on Equity(INR CRs) Return on Asset (INR CRs) Financial Leverage (INR CRs)

10.33% 7.1 x
1.47% 7.0 x

9.61%
6.8 x

8.92% 1.35% 1.35%

8.65% 1.31% 6.4 x

2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024

Financial Performance:
• Assets under management as of March 31, 2024, stood at INR 4.64 lakh crores. Net worth of the company has grown to around INR 49,178 crores.
• Revenue for the year was INR 26,644.56 crores. Profit for the year was INR 6,412.10 crores.
• Total borrowing as of March 31, 2024, was INR 412,032.10 crores. Maintaining a strong Asset Liability Management by raising funds for long tenure.
Operational Efficiency:
• Operating expenses are low, about 0.09% of total income. Gearing ratio as of March 31 was 8.38.
• Capital adequacy is high at 616% due to major exposure to sovereign. Return on equity for the year was 13.66%.
• Return on assets was 1.31%. Net interest margin was at 1.38%.Earnings per share stood at INR 4.91.
Dupont Analysis - Return on Asset & Return on Equity
Return on Equity (ROE)
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 933.8 2,054.7 2,254.8 3,192.1 4,416.1 6,089.8 6,337.0 6,412.1
Average Shareholders Equity 17,772.3 19,933.5 31,993.0 42,814.1 51,063.3 58,953.0 65,968.5 71,913.7
Return on Equity (ROE) 5.25% 10.31% 7.05% 7.46% 8.65% 10.33% 9.61% 8.92%

ROE - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 933.8 2,054.7 2,254.8 3,192.1 4,416.1 6,089.8 6,337.0 6,412.1
Revenue 9,047.4 9,267.1 11,133.6 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4
Net Margin(A) 10.32% 22.17% 20.25% 23.78% 28.00% 30.00% 26.52% 24.06%

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Revenue 9,047.4 9,267.1 11,133.6 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4
Average Total Asset 1,19,025.0 1,45,559.0 1,84,036.0 2,41,053.9 3,27,992.8 4,15,230.9 4,70,563.5 4,88,106.8
Asset Turnover Ratio(B) 0.1 x 0.1 x 0.1 x 0.1 x 0.0 x 0.0 x 0.1 x 0.1 x

Average Total Asset 1,19,025.0 1,45,559.0 1,84,036.0 2,41,053.9 3,27,992.8 4,15,230.9 4,70,563.5 4,88,106.8
Average Shareholders Equity 17,772.3 19,933.5 31,993.0 42,814.1 51,063.3 58,953.0 65,968.5 71,913.7
Equity Multiplier (C) 6.7 x 7.3 x 5.8 x 5.6 x 6.4 x 7.0 x 7.1 x 6.8 x

Return on Equity (A*B*C) 5.25% 10.31% 7.05% 7.46% 8.65% 10.33% 9.61% 8.92%

Return on Asset
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 933.8 2,054.7 2,254.8 3,192.1 4,416.1 6,089.8 6,337.0 6,412.1
Average Total Asset 1,19,025.0 1,45,559.0 1,84,036.0 2,41,053.9 3,27,992.8 4,15,230.9 4,70,563.5 4,88,106.8
Return on Assset (ROA) 0.78% 1.41% 1.23% 1.32% 1.35% 1.47% 1.35% 1.31%

ROA - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Net Profit 933.8 2,054.7 2,254.8 3,192.1 4,416.1 6,089.8 6,337.0 6,412.1
Revenue 9,047.4 9,267.1 11,133.6 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4
Net Profit Margin (A) 10.32% 22.17% 20.25% 23.78% 28.00% 30.00% 26.52% 24.06%

Revenue 9,047.4 9,267.1 11,133.6 13,421.0 15,770.5 20,299.4 23,892.0 26,645.4

Average Total Asset 1,19,025.0 1,45,559.0 1,84,036.0 2,41,053.9 3,27,992.8 4,15,230.9 4,70,563.5 4,88,106.8
Asset Turnover Ratio (B) 0.1 x 0.1 x 0.1 x 0.1 x 0.0 x 0.0 x 0.1 x 0.1 x

Return on Asset (A*B) 0.78% 1.41% 1.23% 1.32% 1.35% 1.47% 1.35% 1.31%

Dupont Summary
• The company return on equity has declined to 9.61% in 2023 which was previously 10.33 % in 2022 and now it has
decreased and reached to 8.92 % as of march 2024.
• Net profir margin of the IFRC witnessned a downfall of 3.48 % in 2023 which was 30 % in 2022 and further declined
by 1.46 % and reached 24.6 % as of march 2024.
 VALUE AT RISK (VAR)
Date Adj Close Return Shorted Returns Replication Simulated Return Calculation of Value at Risk - IFRC (Historical )
16-01-2024 141.9 1.1684222 0.250881865 1 -0.006042639
04-09-2023 65.4 -0.573697 0.196412469 2 -0.013983144 Historical Approach
13-02-2024 153.4 0.0941176 0.154193309 3 0.005877973 Mean 0.29%
14-03-2024 140.3 2.1991577 0.128772636 4 -0.038251911 Std Deviation 2.71%
03-08-2023 43.8 -0.198206 0.125944482 5 0.023535689 min -13.50%
01-09-2023 54.7 -0.409854 0.110557772 6 0.014746402 max 25.09%
14-12-2023 92.7 0.8988587 0.109580862 7 0.016083068 CMP 176
07-08-2023 48.8 -0.412979 0.104328604 8 0.001795685
11-09-2023 83.1 -0.481318 0.099221798 9 0.045878022 Monte Carlo Simulation
19-01-2024 160.3 3.2773521 0.095726496 10 -0.028041366 Mean 0.31%
31-07-2023 37.5 0.258649 0.089871544 11 -0.001579943 Std Deviation 2.66%
26-12-2022 29.8 -0.148668 0.089766652 12 -0.003591854 min -8.57%
20-12-2022 35.0 -0.506574 0.085236056 13 -0.016299319 max 8.58%
05-09-2023 70.9 -0.549527 0.083208465 14 -0.003680334 CMP 176
14-05-2024 157.3 3.8020043 0.078135774 15 0.001226671
12-12-2022 32.8 -0.601494 0.075684487 16 0.011583687 Percentile Confidence VAR % Stock price VAR (INR)
11-12-2023 82.2 -0.513609 0.073107038 17 0.002145141 5.00% 95.00% -4.06% 183.1473141 -7.14731
17-05-2024 169.0 5.5895428 0.071994966 18 -0.008532171 1.00% 99.00% -5.90% 186.3774407 -10.3774
16-11-2022 25.6 -0.740549 0.069444495 19 0.009010724 0.50% 99.50% -6.64% 187.6849723 -11.685
21-12-2023 98.8 3.882392 0.069226622 20 -0.024865973
10-05-2021 20.2 -0.260088 0.068720517 21 0.007816873
17-11-2022 27.4 0.1812633 0.066921447 22 -0.039582367
22-10-2021 23.2 -0.865246 0.06611575 23 7.53776E-05
24-01-2024 171.9 1.3960827 0.065716 24 -0.058341233
07-09-2023 71.7 -0.041378 0.064000141 25 -0.015257627
10-10-2023 74.8 -0.603923 0.063246685 26 0.006094501
03-06-2024 188.9 0.0529395 0.062710876 27 -0.031146577
21-05-2024 179.4 -0.037802 0.061834302 28 0.001583148
23-05-2024 186.5 0.6446208 0.061770603 29 0.030766309
12-01-2024 113.4 0.1328672 0.061300928 30 -0.005850547
19-12-2023 100.1 1.5201091 0.060943298 31 -0.006754858
01-08-2023 39.7 0.225416 0.060209476 32 -0.009427071
31-01-2023 32.4 0.0295951 0.059294827 33 0.005176713
27-12-2022 31.5 -0.043219 0.057660559 34 0.031210178
02-05-2023 32.9 -0.053597 0.056692861 35 0.041151127
03-05-2023 34.8 0.1472491 0.056631867 36 0.056822271
24-11-2022 30.3 -0.078987 0.056410233 37 0.012875472
28-11-2022 32.9 -0.564851 0.05503145 38 0.013197068
08-09-2023 75.6 1.609137 0.053998562 39 0.0169885
24-04-2023 29.0 -0.162889 0.053475986 40 -0.02374183
29-11-2022 34.6 -0.549797 0.052160926 41 -0.009877639
17-11-2023 76.9 -0.513445 0.05198364 42 0.004366517
26-04-2024 158.1 3.61092 0.051913498 43 0.023214409
21-07-2023 34.3 -0.770105 0.051127869 44 0.030890728
17-01-2024 149.1 -0.14873 0.051110326 45 0.027863663
31-01-2024 175.1 6.532046 0.051005102 46 -0.002460188
01-03-2021 23.3 -0.299547 0.05070975 47 0.049755399
07-06-2023 33.2 0.5471167 0.047987703 48 0.04135455
01-10-2021 21.5 -0.017363 0.045951724 49 0.034762648
04-02-2021 21.8 -0.199064 0.045360925 50 0.006954668
03-04-2023 27.3 -0.024561 0.045112793 51 0.014023171
02-03-2023 28.0 -0.166667 0.043956015 52 -0.0008598
01-12-2022 33.5 0.1103896 0.042682948 53 0.017391298
25-04-2023 30.2 0.2851114 0.042301136 54 0.020091823
07-11-2022 23.5 0.0599251 0.042194233 55 0.033944209
07-06-2021 22.2 -0.842664 0.042194193 56 -0.014513646
22-03-2024 140.9 1.826275 0.042144155 57 -0.036432048
14-08-2023 49.9 0.6168521 0.039877288 58 -0.005429969
27-04-2023 30.8 -0.821759 0.039669464 59 0.022165584
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