Look past the near-term pain in IRCTC for its monopoly in Railways

While FY21 likely to be washout for IRCTC, the firm appears to have all the ingredients in place to see strong earnings growth over next 2-3 years, say analysts

The Indian Railway Catering and Tourism Corporation (IRCTC) stock has declined around 4 per cent in the past three months, as against a 15 per cent rise in the Sensex. Earnings pressure and the government’s stake sale plans are some near-term factors weighing on investor sentiment.

The government is planning to sell 15-20 per cent of its 87.4 per cent stake in the company through an offer for sale, to comply with Securities and Exchange Board of India’s (Sebi’s) public shareholding norms. This, it is believed, could cap the share price as new shares hit the market.

However, analysts foresee strong earnings