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IRCTC on fast track, shares zoom over 9%
IRCTC share price rally is mainly because of the company's aggressive focus on its hospitality business where it has been making tie-ups with hotels, aviation and surface transport service providers, an expert has said.
IRCTC shares zoomed over 9 per cent on Tuesday as they continued to rally for the third straight session on Tuesday with the stock hitting a new lifetime high of ₹3,296.75 per share in early deals. Market experts have attributed the rally to the easing of Covid-19 restrictions, the faster pace of the government’s vaccination drive and the stock split.
The market capitalisation of the Indian Railway Catering and Tourism Corporation also crossed ₹52,000 crore on the BSE. IRCTC shares have rallied 13.8 per cent in four trading sessions from their previous closing low of ₹2742.75 on September 1. The stock has also zoomed 142 per cent from its 52-week low of ₹1291 recorded on November 4, 2020. IRCTC share price has shot up around 10 times from ₹320 per share to ₹3,296.75 per stock level in around 2 years against its IPO issue price.
Market analysts also said that the market is highly positive about the counter after IRCTC revealed its aggressive expansion plan in the hospitality sector. They are of the opinion that IRCTC shares may go up to ₹5,000 levels in the next one and a half to two-year time frame, according to Live Mint.
"IRCTC shares have given breakout above ₹3,000 and has achieved its immediate target of ₹3200. Now, it may go up to ₹3400 soon,” Sumeet Bagadia, executive director at Choice Broking said, according to Live Mint.
Santosh Meena, head of research at Swastika Investmart Ltd, said the reopening theme gaining momentum and Railways' asset monetisation plan are some major triggers for IRCTC shares’ re-rating. "Correction in IRCTC share price due to Covid-19 was a great opportunity for portfolio investors to latch onto it as everyone wanted to buy it at any price before Covid-19 spread because of its monopoly and future growth outlook,” Meena also said.
Ravi Singhal, vice chairperson at GCL Securities said, that the IRCTC share price rally is mainly because of the company's aggressive focus on its hospitality business where it has been making tie-ups with hotels, aviation and surface transport service providers. “It is also tying up with local food suppliers that means the IRCTC management is in the mood to emerge as A to Z solution provider in the hospitality sector. One should hold or buy this counter for the long-term keeping an 18 to 24-month target of ₹5,000,” Singhal was quoted as saying by Live Mint.
IRCTC board approved a stock split in the ratio of 5-for-1 to make the shares affordable for small investors on August 12, 2021. IRCTC posted a net profit of ₹82.52 crore in Q1 FY22 compared with a net loss of ₹24.6 crore in Q1 FY21. Revenue from operation jumped 85.3 per cent year-on-year to ₹243.36 in Q1 FY22 over Q1 FY21. IRCTC is a Mini Ratna public sector enterprise under the ministry of railways. It is the sole entity authorised by Indian Railways to provide catering services, online railway tickets and packaged drinking water at railway stations and trains. The government held a 67.4 per cent stake in the company as of June 30.
(With agency inputs)
