Indian Railway Catering and Tourism Corporation (IRCTC) continued to show meaningful sequential improvement in revenue and profitability led by easing of covid curbs and vaccination. The company’s revenues in January will be impacted by omicron, however, we expect easing of curbs and festive season will help in boosting revenues in Q4-FY22. Neha Khanna, director, ValPro, said: “The steep surge in net profit is mainly led by contribution from all the segments and low base of last year.”
The company’s board has declared an interim dividend of Rs 2 per share each for the financial year 2021-22. The board has fixed Friday, 18 February, as record date for the purpose of payment of interim dividend of the financial year 2021-22.
Also, IRTCT called all it’s chefs on board trains, investors also have started adding the stock to their portfolio. IRCTC, the catering and tourism arm of Indian Railways said it resumed the services of cooked food in passenger trains of Indian Railways, which were suspended due to the Covid-19 pandemic in the country. The company also resumed its services of Tejas Express between Mumbai and Ahmedabad.
Jinesh Joshi, research analyst at Prabhudas Lilladher, said: “Swift recovery in tourism revenues and resumption of cooked meal services along with tariff hike were key positives. However, the impact of enhancement in license fee from tariff hike will be visible from March onwards given sales assessment is still pending.”
According to market experts, the recent Budget announcement on additional Vande Bharat trains is going to fuel IRCTC share price in long term.
Santosh Meena, head of research, Swastika Investmart Ltd., said: “IRCTC is consolidating for more than 3 months in the range of 780-920 and I think strong results can help it to gain momentum where it may try to breakout this range in the coming days whereas it also has a tailwind of post covid normalization. If it manages to close above 920 level then we can expect a rally towards the 980-1000 zone. However, 860 is an immediate hurdle. On the downside, if it slips below 780 then we can expect any weakness.”
On whether investors should include the stock in their portfolio at the current value, Joshi recommends that investors wait for a better entry point. IRCTC trades at 66x/60x our FY23/FY24 EPS estimate and we believe valuations price in the recovery opportunity from 3rd wave and strong growth prospects (30 per cent EPS CAGR over FY22- 24E).
IRCTC has reported great results in all parameters. Investors can look to buy the IRCTC stock on dips, keeping a target price of Rs 1,350 with one year time frame, said Ravi Singhal, vice chairman, GCL Securities.
“The stock has been consolidating for a long time in a range any breakout above Rs 926 will lead to good moves we expect a upside of about 20-25 per cent, we are bullish on IRCTC considering various initiatives by government for railways,” Manoj Dalmia, founder and director, Proficient Equities Limited. Further, he recommends a hold for long-term tag for the stock.
On Thursday, IRCTC stocks were up 0.80 per cent at Rs 831.06 on NSE.
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