IRCTC corrects after F&O ban

Indian Railways Catering and Tourism Corporation (IRCTC) declined 1.59% to Rs 3,239.85 after the stock was banned on the NSE's F&O segment as it has crossed 95% of the market-wide position limit (MWPL).

The stock surged 20% in the past five sessions to end at Rs 3,292.25 on Wednesday (8 September), from its recent closing low of Rs 2,742.75 on 1 September 2021.

On a year-to-date (YTD) basis, the stock has added 127.38% while the benchmark Sensex has added 22% during the same period.

IRCTC, Indiabulls Housing Finance and National Aluminium Company (Nalco) have been put under the futures & options (F&O) ban by the NSE for trade on Thursday, 9 September 2021. The derivative contracts in the mentioned stocks have crossed 95% of the market-wide position limit.

It is hereby informed that all clients/members shall trade in the derivative contracts of said security only to decrease their positions through offsetting positions," the exchange said. "Any increase in open positions shall attract appropriate penal and disciplinary action," NSE added.

On the technical front, IRCTC's RSI (relative strength index) stood at 80.022. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading above its 50-day, 100-day and 200-day daily simple moving average (SMA) placed at 2512.25, 2204.62 and 1898.82, respectively.

IRCTC, a Mini Ratna public sector enterprise under the administrative control of Ministry of Railways, is the sole entity authorized by Indian Railways (IR) to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India. As of 30 June 2021, the Government of India held 67.4% stake in the company.

The company posted a net profit of Rs 82.52 crore in Q1 FY22 compared with net loss of Rs 24.6 crore in Q1 FY21. Revenue from operation jumped 85.3% year-on-year to Rs 243.36 in Q1 FY22 over Q1 FY21.

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