Shares of Indian Railway Finance Corporation Ltd. (IRFC) and Rail Vikas Nigam Ltd. (RVNL) are down in Thursday's trading session, both trading with losses of close to 3%. However, both of these shares have corrected close to 20% over the last one month.
Both IRFC and RVNL's shares have corrected 18% in the month of February. It must be noted that both these stocks had a stellar rally in January, both having gained nearly 75% that month.
Despite the correction, shares of RVNL are trading at a one-year forward price-to-earnings multiple of 37.15 times, which is well above its five-year average price-to-earnings multiple of 17.44 times. At its record high levels of ₹345.5, the stock traded at a price-to-earnings multiple of 47 times. RVNL shares have corrected 27% from their peak.
IRFC, which listed in January 2021, is trading at a current year price-to-earnings multiple of 29.65 times, which is also well above its three-year average multiple of 11.7 times. At its peak price of ₹192.8, IRFC shares traded at a price-to-earnings multiple of 37 times. From its peak, IRFC has corrected by 25%.
Even after the correction from its peak, shares of IRFC are still up 5x from their IPO price. RVNL shares are up nearly 14x from their IPO price of ₹19 over a five-year period.
"We continue with some of these stocks like IRFC, RVNL, Railtel into our portfolios and are riding the momentum. However fresh investors should wait for pullback as they have run up a bit too much for comfort," Mayuresh Joshi of William O'Neill India told CNBC-TV18 on January 17.
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