Indian Railway Finance Corporation and Indian Renewable Energy Development Authority are two prominent public sector companies. Both companies listed on the stock exchange are known for their contributions towards railway and energy generation infrastructure development. Moreover, the public listed companies have a stable business model with a significant capital outlay, making them a perfect selection for a diversified portfolio.
However, Investors must analyse both stocks on a long-term investment basis. The following article offers information about IRFC and IREDA, helping investors to make sound decisions regarding investment for the long term:
1. IRFC:
Indian Railway Finance Corporation (IRFC) is a leading railway finance company that is engaged in financing railway development projects like the setting up of railway infrastructure, tracks, and freight corridors. The company serves as a financial arm of the railway industry, helping with the setup of railway infrastructure and electrification. Assisting in sourcing funds from various sources like the debt market, the company ensures that the important railway infrastructure development projects are financed for hassle-free setup.
The current business model, financial performance, and IRFC share price are a testament to its intrinsic strength. With a rise in profits and profit margins by more than 13% and 24% respectively, IRFC serves as the best organisation that investors can select for their long-term investment portfolio.
Moreover, the financial ratios like the price to book ratio, price to earnings ratio, and return on equity are positive, making them a perfect selection for an investment portfolio. The company even offers strong dividend payouts and is known for its strong financial backing and minimal credit risk.
The future growth potential of the IRFC is quite high as well due to the strong focus of the government towards development of railway infrastructure and its modernity. New Railway projects are being approved regularly making the role and contribution of the IRFC crucial in the long term.
2. IREDA:
India Renewable Energy Development Authority (IREDA) works under the renewable energy development industry helping with acquiring finance for development of renewable energy sources and projects. Solar, wind, Hydro and other renewable energy generation projects are developed with the financial assistance of the IREDA. The company operates under a crucial industry with high growth potential.
The current financial performance of the company boasts of a rise in total net profits by 53.5% and an increase in the profit margins by 25.3%. Moreover, the financial ratios, which are powerful Indicators of a company’s performance, are on the positive side.
The current IREDA share price is ₹172, which has increased by more than 26% in a single year. The strong asset quality, capital adequacy ratio, and future growth potential, the company can also serve as a perfect addition to the investment portfolio of an investor.
Conclusion:
Comparing IREDA and IRFC based on various aspects like their finances performance, business model, financial ratios and future growth potential, both companies serve as the perfect selection for a long term growth strategy. While IRFC can deliver stability and low risk, IREDA can deliver better chances of growth.
Investors can therefore decide between the two stocks based on their current and future intrinsic value and personal risk appetite. With careful research and analysis, the best stock can be selected for an investment portfolio.