Shares of Indian Railway Catering & Tourism Corporation Ltd (IRCTC) jumped 3.11% in intraday on the Bombay Stock Exchange on Wednesday ahead of its third quarter earnings results slated to be released later today. The IRCTC stock price rose to an intraday high of Rs 1,449.85, rising 7.3% on BSE, as against the day’s low of Rs 1,350. The stock was trading close to its 52-week high of Rs 1,562 touched on February 6, 2020.
Earlier today, IRCTC shares opened lower for the third consecutive session, falling 3.99% to Rs 1,350.05 on the BSE. At the time of reporting, IRCTC share price was trading 0.24% lower at Rs 1,402.
At the Union Budget 2020, it was proposed that more Tejas-like private trains will be launched in future. Since the Union Budget 2020, IRCTC shares have risen over 17%.
On October 14, 2019, IRCTC share price was listed on the exchanges BSE and NSE. IRCTC’s 52-week high of Rs 1,562 is almost 388% higher from its issue price of Rs 320 and 142% higher from its listing price of Rs 644.
Prabhudas Liladhaer in its recent report post-budget included IRCTC stock in its top picks on back of its strong growth visibility and above-market growth rates.
“IRCTC is a monopolistic conglomerate with no comparable listed peer set & limited valuation history,” it added in its research note.
Moreover, IRCTC is the only entity authorised by Indian Railways to manufacture and distribute packaged drinking water (PDW) at all railway stations and on trains. It also provides food catering services to passengers on trains (mobile catering) and at stations (static catering).
“The monopolistic entity authorized to provide packaged drinking water, catering, and online ticket booking services to passengers travelling by Indian Railways. It has a market share of nearly 73% in online rail bookings and approx 45% in packaged drinking water. IRCTC also offers hospitality services on trains & other locations and promotes tourism in India through PPP and has been conferred the status of Mini Ratna (Category- I Public Sector Enterprise) by GoI. Being a regulated monopoly acts a strong moat and provides a huge sustainable competitive advantage over the competition,” said Prabhudas Liladher in its report and rated ‘BUY’ with 15% upside to IRCTC stock at the current market price (CMP) of Rs 1,004, with a target price (TP) of Rs 1,339.
IRCTC’s net profit grew 14% for the half-year period ended September 30, 2019, while its total earnings from internet ticketing services jumped 80.8% to Rs 199.3 crore.
