IRCTC shares cross Rs 3,000 for the first time; what's next?
IRCTC is the only entity authorised by Indian Railways to provide catering services to railways
Shares of Indian Railway Catering and Tourism Corporation (IRCTC) crossed Rs 3,000-level for the first time amid the ongoing rally on Dalal Street. The scrip traded 4.86% higher at Rs 3008.90 apiece at around 12.05 pm (IST) on the BSE. Meanwhile, it hit a record high of Rs 3041.20. On the other hand, the benchmark Sensex traded 0.27% higher at 58,291. at around the same time. With the ongoing rally in the counter, shares of the company have surged over 100% in 2021 so far.
The correction due to the Covid-19 pandemic last year was a great opportunity for portfolio investors due to its monopoly business and robust growth outlook.
Commenting on IRCTC, Santosh Meena, head of research, Swastika Investmart said, “IRCTC is in strong bullish momentum. The reopening theme is getting momentum whereas it has a tailwind of stock split news. Railways’ asset monetisation plan is another trigger for its re-rating. The bullish momentum may continue while Rs 3,070-3,100 is an immediate resistance zone. Above this, it is likely to head towards the Rs 3,300 level. If it witnesses any profit booking from the Rs 3,070-3,100 resistance zone then Rs 2,775-2,700 will be a good buying zone.”
IRCTC is the only entity authorised by Indian Railways to provide catering services to railways, offer online railway ticket booking services and deliver packaged drinking water at railway stations and trains. It has emerged as a comprehensive tourism and hospitality service provider in India. It is a debt-free company and continues to recover strongly, quarter on quarter, from the impact of the Covid-19 pandemic.
Of late, the company reported a net profit of Rs 82.52 crore for the quarter ended June 30. It had reported a loss of Rs 24.60 crore in the same quarter last year. The Indian Railways’ e-ticketing and catering arm’s revenue from operations in the first quarter of the current fiscal stood at Rs 243 crore, compared to Rs 131 crore in the corresponding period last year, registering a growth of 85.4% year-on-year. IRCTC’s board also approved a stock split of 5:1, subject to the approval of the Railway Ministry.