IRCTC tanks over 30% from its life high; can buy at Rs 4,000-3,800 level, say analysts

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Shares of IRCTC are on everybody’s radar as they have tanked 31.57% in just two trading sessions. It touched a lifetime high of Rs 6,396.30 yesterday and made a low of Rs 4,377.3 so far in today’s session. The stock price came down at a much faster pace than it went up as it advanced 31.64% in five sessions from its last closing low of Rs 4,772.85 on October 11, 2021. The relentless rally saw its market capitalisation (m-cap) crossing the Rs 1 lakh crore mark this week making it the ninth PSU with over Rs 1 lakh-crore market cap.

“IRCTC witnessed a sharp fall in yesterday and today’s trading session after hitting a record high of Rs 6,396. The fundamentals are still strong but there is valuation concern after a steep run and there was a clear speculative move as it was easy to make money for the traders every day. So, we are seeing a technical correction and may head towards 20-DMA ((Daily Moving Average) which may coincide with Rs 4,500 level. However, Rs 4,000-3,800 will be a critical demand zone to take fresh buying positions,” said Santosh Meena, Head of Research, Swastika Investmart.

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

IRCTC posted a net profit of Rs 82.52 crore in Q1 FY22 compared with a 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.

Shares of IRCTC were listed on the bourses on October 14, 2019. The stock debuted at Rs 644, a premium of 101.25% to the initial public offer (IPO) price of Rs 320. The stock has soared 1,268% from its IPO price.