Investors eyeing Indian Railway Finance Corporation Ltd (IRFC) and the broader railway sector should exercise caution, according to market expert Pradeep Halder. Halder, offering a sharp assessment of the sector, has advised against fresh buying or averaging positions in IRFC, stating that the railway theme has lost significant momentum after an extended period of growth and shows no convincing signs of revival.
Railway Sector Lacks Revival Despite Triggers
Halder noted that railway stocks have largely remained inactive for the past two to three years, failing to respond to typical positive triggers. Even after budget announcements, clear policy visibility, and fresh project approvals, the sector has not seen sustained price action. He argues that the market has moved on from the railway theme, suggesting that the best phase for these stocks has already passed, leading to a prolonged cooling-off period after delivering outsized gains.
New Orders Insufficient to Boost Sentiment
A key point in Halder's analysis is his dismissal of recent order wins as a near-term catalyst. Despite reports of railway-related approvals worth approximately Rs 10,000 crore in Karnataka, he believes such announcements are unlikely to shift the market's current cautious stance towards the sector. This reflects a broader market reality where, once valuations and expectations have run high, even strong fundamentals and order books may not be enough to trigger a further rerating.
Technical Charts Offer Little Comfort
From a technical perspective, the outlook is equally discouraging. Halder indicated that there is no meaningful support visible on daily, weekly, or even hourly charts for railway stocks. This technical weakness makes it difficult to justify a confident hold recommendation at this stage.
His consistent strategy for the past one-and-a-half years has been to “sell on rise” for railway counters. He pointed out that the broader sector has already declined by roughly 40% from the levels observed when he first adopted this cautious stance.
What Could Change the View?
For sentiment to improve and a more constructive view to emerge, Halder suggests waiting for a proper base formation and a decisive 20-25% upward move from current levels. Until such conditions are met, long-term investors in IRFC and other railway stocks may need to prioritize capital protection over holding based purely on speculative hope.
Disclaimer: This article provides market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.