Business

Will the shares of IRCTC, which made modest profits in the September quarter, run now or not?

Highlights:

  • IRCTC posted a profit of Rs 159 crore in the September quarter
  • The company’s total revenue grew by 357 percent to Rs 404 crore
  • Analysts differ on how Q2 results will affect stocks

New Delhi: State-owned IRCTC is expecting strong profits in the September quarter, which is likely to impact its stocks. The company’s revenues fell short of market expectations, while EBITDA margins rose to a record 52.2 per cent. Brokerage firms have been giving mixed reactions to the stock move since the September quarter figures were released.

Some brokerage firms are predicting a fall in share prices, while others say it could rise as high as 18 percent. However, the government had recently proposed a 50 per cent share in the convenience fee charged by IRCTC for online ticket booking. This caused a huge jump in the stock. The offer was dropped within hours of reckoning, but considering the possibility that something similar could happen in the future, most experts are of the view that the chances of seeing the stock rally are almost zero.

According to Prabhudas Lilladher, the stock can fall to Rs 779. Whereas the target price of this stock has been given by IIFL at Rs 745. He also said that there is also a possibility of an increase in the fixed charges given to the Ministry of Railways for the operation of Tejas train, which is likely to affect the company’s profits. On the other hand, IDBI Capital as well as Dalal & Brocha Stock Broking believe that the stock is likely to rise up to 18 per cent in the coming days. IDBI Capital has set a target price of Rs 985, while Dalal & Brocha has a target price of Rs 943.

The company said in a conference call that if the government had not been offered the 50 per cent concession fee, it would have increased it or took other steps to offset its revenue. However, the company has not commented on whether the second class reservation will continue even after Corona. At present, 40 per cent of the tickets booked in the Railways are second class. Due to Corona, the government has also banned travel in unreserved class without a confirmed ticket.

The stock has recently split in the ratio of 1:5. According to him, he had achieved an all-time high of Rs 1,278 only last month. However, at present it is trading at a discount of 35 per cent. When the market opened on Tuesday, the stock opened at Rs 835 and reached Rs 850 at 10.30 am.

The company posted a profit of Rs 159 crore in the September quarter, which is 386 times higher than the previous quarter. Its revenue stood at Rs 404.9 crore, which is 357.3 percent higher than YoY. IRCTC is making decent profits in online ticket booking but is yet to surpass the revenue of its food and beverages and tourism sectors.

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