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IRCTC Shares Decline Despite 251% Jump in June Quarter Revenue; Should you Invest?

By: Aparna Deb

News18.com

Last Updated: August 11, 2022, 12:33 IST

New Delhi, India

IRCTC shares were trading lower in the opening trade on Thursday morning

IRCTC shares were trading lower in the opening trade on Thursday morning

Indian Railway Catering and Tourism Corporation (IRCTC) were trading lower in the opening trade on Thursday morning.

IRCTC Shares Today: Indian Railway Catering and Tourism Corporation (IRCTC) shares were trading lower in the opening trade on Thursday morning. IRCTC posted a 196 per cent surge in its net profit, at Rs 246 crore, for the quarter ending June 30, 2022-23 (Q1 FY23). It reported a net profit of Rs 82.5 crore in the year-ago period (Q1 FY22). The company’s revenue from operations zoomed 251 per cent to Rs 853 crore in the June quarter of this financial year from Rs 243 crore in Q1 FY22.

Share Price History

On the NSE the shares of IRCTC had touched a 52-week-high of Rs 1,279.26 on October 19, 2021, and a 52-week-low of Rs 499.47 on August 19, 2021, which means that at the current market price of Rs 672.50 the stock is trading 47 per cent below the 52-week-high and 34 per cent above the 52-week-low. At the current market price the stock is trading above the 5 days, 10 days, 20 days, 50 days, 100 days EMA but below the 200 days Exponential Moving Average (EMA).

Should you Buy?

Jinesh Joshi – research analyst, Prabhudas Lilladher Pvt Ltd, said: “Revenues increased 250.3 per cent YoY to Rs8,526mn (PLe of Rs7,228mn). Revenues from Internet Ticketing/Catering/Rail Neer/Tourism (excluding State Teertha) increased 101.1 per cent YoY/520.9 per cent YoY/185.8 per cent YoY/1005.1 per cent YoY to Rs3,017mn (PLe Rs3,023mn)/ Rs3,522mn (PLe Rs2,836mn)/Rs836mn (PLe Rs600mn)/Rs819mn (PLe Rs519mn) respectively. All the segments were EBIT positive. Tourism achieved EBIT breakeven for the first time since pandemic at 1.1 per cent margin.”

“The stock currently trades at 54x our FY24E EPS estimate of Rs12.5. We currently have a HOLD rating on the stock with a TP of Rs 649,” he said.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said: “The Railway catering stock (IRCTC) on the weekly chart has witnessed a sustainable upside bounce in this week. Presently, the stock price is in an attempt to move above the weekly hurdles of 10 and 20 EMA around Rs 638/667 respectively. Volume has started to expand during the present upside breakout. Daily 14-period RSI signals further strengthening of upside momentum in the stock price ahead. Buying can be initiated in IRCTC at CMP (673), add more on dips down to Rs 650, wait for the upside targets of Rs 730 and Rs 805 in the next 3-5 weeks. Place a stoploss of Rs 630.”

Tanusree Banerjee, co-head of research, Equitymaster, said: “IRCTC has posted a good set of profit numbers amidst concerns about the impact of inflation on its operating cost. Its monopoly status and strong balance sheet continue to keep the stock in favour amongst investors. Having said that, some changes in the ticketing norms post-Covid are expected to impact revenue growth in the near term.”

The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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first published:August 11, 2022, 10:19 IST
last updated:August 11, 2022, 12:33 IST