IRCTC Rallies 13% On Stellar Q3 Show; Stock Up 400% Over Issue Price

Shares of IRCTC (Indian Railway Catering & Tourism Corporation) jumped 13 per cent in Thursday’s session after the company posted nearly three times jump in December quarter profit.

The company on Wednesday reported a 179.65 per cent year-on-year rise in profit at Rs 205.80 crore for the quarter ended December 31. The figure stood at Rs 73.59 crore in the corresponding quarter last year.

The state-run company said its revenue from operation surged 64.59 per cent to Rs 715.98 crore for the quarter.

Tracking the results, the stock jumped 12.55 per cent to hit a high of Rs 1,596.95 on BSE.

IRCTC declared an interim dividend of Rs 10 on face value of Rs 10 per share.

With Thursday’s gains, the scrip has rallied 399 per cent over its issue price of Rs 320 per share but many analysts believe the scrip still is reasonably valued.

It got listed on October 14, 2019 on bourses.

You might also be interested to read: From PMI To Sensex, FM Says Seven Signs Show ‘Green Shoots’

Yogesh Mehta, Founder at Yield Maximiser said the scrip was undervalued at the time of IPO.

“It has jumped almost five times from the IPO price. But IRCTC is into monopolistic business in terms of catering and ticket booking. It has pricing power. There is no other competition. It has good prospects, with at least a 27-28 per cent growth rate. I believe that even if somebody asks me if 40 times PE multiple in IRCTC is reasonable, I will say yes,” Mehta told ET NOW.

Source: Economic Times

Comments are closed.