IRCTC hits record high; rises 5% in two sessions

Indian Railway Catering and Tourism Corporation (IRCTC) rose 2.63% to Rs 3868.75, extending gains for the second trading session.

Shares of IRCTC have risen 5.04% in two sessions from its recent closing low of Rs 3,683.20 on 15 September 2021.

The stock hit a record high of Rs 4017 today. It has surged 199.67% from its 52-week low of Rs 1,291 hit on 4 November 2020.

IRCTC moved out of the NSE's F&O curb on Friday (17 September). It was put under the F&O ban in the past two sessions after its derivative contracts crossed 95% of the market-wide position limit.

In the past one month, the stock has surged 45.02% as against 6.22% rise in the Sensex. It has soared 182.33% in the past one year compared with 52.04% surge in the Sensex.

On the technical front, the stock's RSI (relative strength index) stood at 62.81. 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 simple moving average (SMA) placed at 3574.62 and 200-day SMA at 2945.77.

Shares of IRCTC were listed on the bourses on 14 October 2019. The stock debuted at Rs 644, a premium of 101.25% to the initial public offer (IPO) price of Rs 320. Since then the stock has soared 1108.98% from its IPO price.

IRCTC is in demand recently as reopening theme is gaining momentum post Covid-related travel curbs across the country. Investors are also anticipating big gains for the company following Indian railways' asset monetization plan.

The monetisation plan envisages allowing private companies to lease and operate infrastructure owned by the government across sectors. This includes running passenger trains, redeveloping railway stations and railway colonies, operating freight terminals and railway tracks.

Earlier this week, IRCTC opened a new executive lounge at New Delhi Railway Station (NDLS) to offer an enhanced travel experience to passengers travelling by Railways.

Passengers would have to pay an entry charge of Rs 150 plus taxes for the first hour and Rs 99 for each extra hour to access this newly-commissioned executive lounge. The lounge is operational now on a 24x7 basis and the entry charges include a host of services such as comfortable seating facilities, Wi-Fi internet facility, retailing of books & magazines, complimentary tea or coffee or beverages.

According to recent media reports, IRCTC is aggressively focusing on its hospitality business by tying up with hotels, tour and travel service providers and local food suppliers. It is also giving special focus to its food chain business in running trains. IRCTC has also tied up with aviation companies.

Meanwhile, the company's board in August 2021 recommended the proposal for sub-division of one equity share of face value of Rs 10 each into five equity shares of face value of Rs 2 each (5-for-1), subject to the approval of Ministry of Railways, shareholders and other approvals asmay be required.

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.

IRCTC 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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