IRCTC shares rise 5% in early trade; can they cross Rs 1,000 mark?

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) rose over 5% in an otherwise weak market today. IRCTC shares gained 5.14% to Rs 679.60 against the previous close of Rs 646.35 on BSE. The railway stock opened marginally lower at Rs 645.35. Total 2.43 lakh shares of the firm changed hands amounting to a turnover of Rs 16.32 crore on BSE. Market cap of IRCTC climbed to Rs 53,568 crore.

The IRCTC stock hit a 52-week high of Rs 775 on November 7, 2022 and a 52 week low of Rs 557.15 on March 29, 2023.

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In terms of technicals, the relative strength index (RSI) of IRCTC stands at 56.6, signaling it's trading neither in the oversold nor in the overbought territory. IRCTC stock has a one-year beta of 0.9. This signals the stock has low volatility. The large cap stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

The firm on August 9 reported its Q1 earnings.

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IRCTC reported a 5.42 percent fall in its Q1 profit to Rs 232.21 crore against Rs 245.52 crore in the corresponding quarter of the previous financial year. Profit fell 17 percent from Rs 279 crore in the March quarter.

Revenue of the company rose 17.4% to Rs 1001.78 crore from Rs 852.59 crore in the year-ago quarter. Revenues climbed 4 percent quarter-on-quarter (QoQ) from Rs 965 crore. Revenue from the catering segment rose 35 percent YoY to Rs 471 crore in the first quarter. Revenue from the internet ticketing business fell 4 percent to Rs 290 crore in Q1 compared to Rs 302 crore during the same period of the previous year. Revenue from the tourism business climbed 58 percent to Rs 130 crore in the June quarter against Rs 82 crore in the corresponding period last year.

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Analysts are mostly bullish on the stock, assigning long-term targets of up to Rs 1010.

Aditya Gaggar, Director of Progressive Shares said, “IRCTC Ltd has not only given a breakout from the Cup and Handle formation (daily chart) but also a Falling Wedge breakout was witnessed in the stock which was confirmed with a breakout in RSI and an uptick in the volume. As per the Cup and Handle formation, the short-term target comes at Rs 725 while the long-term target as per Falling Wedge arrives at Rs 1010.”

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Gaurav Bissa, VP, InCred Equities said, "IRCTC has been trading in the Rs 610-650 range since the last few weeks. It failed to participate in the rally seen in the PSU space. However, the stock is now witnessing a bullish triangle breakout on the weekly charts, which will be confirmed on a close above Rs 670 levels. The volumes have been trading above 20WEMA since the last couple of weeks, which is a sign of strong accumulation. The stock has witnessed strength on the back of breakout in rsi on the weekly charts which can give a fresh thrust to the stock price. Investors can buy the stock at current levels for an upside till Rs 750 with stoploss placed at Rs 625 levels."

Abhijeet from Tips2trades said, "IRCTC is bullish on the daily charts and a close above Rs 673 could lead to a target of Rs 708 in the near term. Support will be at Rs 650.5."

Jinesh Joshi - Research Analyst, Prabhudas Lilladher has maintained hold rating with a target price of Rs 700.

“We expect sales/PAT CAGR of 14%/13% over FY23-FY25E given 1) traction in non-convenience revenue 2) rail neer expansion (4 plants to be operationalized soon) and 3) healthy growth in catering segment led by extension of services to more trains (200 contracts already in pipeline). IRCTC trades at 44x/42x our FY24E/FY25E EPS estimates and we maintain our ‘HOLD’ rating on the stock with a target price of Rs 700 (45x FY25E EPS),” said Joshi in an earnings review report.

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