IRCTC: Debt-Free Miniratna Share Gains 14% In 1 Day, Hits New 52-Week High; What's Driving This Railway Stock?

Indian Railways category services provider, IRCTC had no bounds in its bullish tone despite the market witnessing pullbacks after a week-long rally. On December 18th, IRCTC stock price rallied by nearly 14% and touched a new 52-week high. In five trading sessions as of now, the stock has gained by 15% and is nearing the Rs 900 mark. IRCTC recently announced a major expansion plan in non-catering services.

On BSE, IRCTC shares ended at Rs 879.10 apiece, with an upside of at least 12.6% from its previous session's print of Rs 780.95 apiece.

The stock's market cap is at Rs 70,328 crore.

During the trading session of Monday, IRCTC shares zoomed by nearly Rs 108 or 13.82% to hit a new 52-week high of Rs 888.90 apiece.

YTD, the stock has gained by nearly 37% on BSE. The outlook for IRCTC looks promising.

IRCTC has an optimistic business pipeline ahead. The company is planning to proliferate in the areas of business beyond Railways. Currently, the company is managing catering services for various Ministries, Government Departments, and Autonomous Bodies including Judiciary and Universities. The company has already set up its hospitality outlets in 9 such organizations including the Department of
Telecommunications - New Delhi, Calcutta High Court, UP Secretariat - Lucknow and so on.

In its regulatory filing last week, the company said, "With a team of hospitality qualified professionals and enormous experience in planning and execution of catering projects and multiple services contracts in Railways, IRCTC is now on
the road to proliferate in the areas of business beyond Railways for promoting its brand and business across the nation."

Further, IRCTC has aggressive plans to further mark its signature in the catering business and customise to the requirements of clients. It has already signed MoUs with various governments and autonomous bodies including defense establishments such as Border Security Force, Indian Maritime University - Kolkata, Cotton University - Guwahati and so on while the company is in the active phase of commissioning 15 more catering units across the country in the near future.

Also, IRCTC foresees expanding its gamut of catering operations across the country and is in discussions with various other government organizations and industrial houses for setting up catering units and also offers comprehensive catering solutions in sync with its aim of becoming a premier brand of Hospitality and Catering in the country.

The company is the hospitality and tourism arm of Indian Railways a MiniRatna PSU under the Ministry of Railways has been playing a pivotal role in upgrading and professionalizing the hospitality services of Indian Railways thereby garnering much appreciation from the passenger fraternity. With its rich experience in handling one of the most important passenger amenities of Indian Railways, IRCTC has been able to strike the right balance between operation and excellence in order to ensure that passengers get the best catering services in the railway ecosystem.

Notably, IRCTC is also among dividend-paying stocks in the railway segment. IRCTC declared an interim dividend of Rs 2.50 per share on a face value of Rs 2 each for FY24. In percentage terms, the dividend payout will be 125% and in value terms will be to the tune of Rs 160 crore.

As per Trendlyne data, the consensus recommendation from 8 analysts for Indian Railway Catering & Tourism Corporation is HOLD. Also, the company's EPS is expected to grow by 17.7% in FY24.

Among the positive factors for IRCTC shares is that -- Debt to Equity Ratio is zero as the company is debt-free; Mutual Fund Holding increased by 0.15% in the last quarter to 1.04; Interest Coverage Ratio is 86.68, higher than 1.5, indictaing that it is able to meet its interest payments comfortably with its earnings (EBIT); Return on Equity(ROE) for the last financial year was 40.58%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit; Promoter Share Holding stayed the same in the most recent quarter at 62%; and Promoter Pledges are zero.

Also, IRCTC's weekly average delivery volume is 23.32%. While the stock is trading above 8 out of 8 SMAs, and above 6 out of 9 Oscillators in bullish zone.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.