Stock in Focus: IDFC on the verge to give a multi-year breakout?

Stock in Focus: IDFC on the verge to give a multi-year breakout?

by 5paisa Research Team Last Updated: Dec 12, 2022 - 10:39 am 48.5k Views
Listen icon

For almost 13 years now IDFC is moving in a downward channel. However, is it on a verge of giving a multi-year breakout? Let’s find out.

IDFC Ltd is yet to release its Q2 FY22 results. But in Q1 FY22, IDFC Ltd posted a total income of Rs 111.6 crore as against Rs 104 crore in the same quarter last year, depicting a growth of around 7% on a consolidated basis. However, it posted a net loss of Rs -410.3 crore as against Rs -26.3 crores in Q1 FY21. Whereas in Q4 FY21, it posted a net profit of Rs 41.1 crores.

IDFC Ltd is a Non-Banking Finance Company (NBFC) that operates as an Infrastructure Finance Company. This means that its core business is financing infrastructure projects in sectors such as energy, telecom, logistics, commercial and industrial projects including hospital, education, and tourism. However, in April 2014, it received approval from the Reserve Bank of India (RBI) to set up a private sector bank. Therefore, from October 1, 2015, they are operating as an NBFC - Investment Company.

As for the stock performance, it is moving in a downward channel for the past 13 years. Presently, it is trading near the upper trendline of the channel. Even the volume seems to be elevated. When it got listed in 2005, it was in a good rally up to 2007. In this period, it generated around 442% on an absolute basis. However, ever since the Great Financial Crises struck in 2008, this stock has been trading downwards in a range-bound fashion.

Looking at the Relative Strength Index (RSI) which is hovering around 61 levels, already gave a multi-year breakout on monthly basis. Also, RSI is trading above its 20-Month Exponential Moving Average (EMA) of 55. This shows strength in the up move of the stock. On the flip side, the Rate of Change (ROC) seems to be declining since February 2021.

So, is IDFC limited likely to give a multi-year breakout? Need to wait and watch for time being. However, with increased volumes and sideways consolidation since March 2021, the stock is indeed gathering strength.

Share Market Today


How do you rate this article?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

378X91-D3

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.


Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest News
52-Week High Stocks: Bharti Airtel, Mahindra & Mahindra, and More; Do You Own Any?

Bharti Airtel has been in the spotlight after announcing a definitive agreement with Axiata Group's Dialog to merge its operations in Sri Lanka.  This has led to Airtel’s stock to surge to a fresh 52-week high, reaching a price of ₹1280.0.

Dynacons Systems & Solutions Share Price Soars 83% in 15 Sessions, Surges 340% in a Year

Dynacons Systems & Solutions, an Indian-based IT company, experienced a substantial surge in its share value with shares rising 83.50% in 15 trading sessions and 340% in one year, driven by heightened investor sentiment follow

8 FPIs Settle Alleged Adani Stock Violations with SEBI

More than half a dozen foreign portfolio investors (FPIs) that owned substantial stakes in Adani Group firms are looking to settle securities violation matters with markets regulator SEBI, said people familiar with the matter.