Indian Railway Catering and Tourism Corporation Ltd (IRCTC) has become the ninth public sector entity to join the elite club of ₹1 trillion market capitalization (m-cap) with its shares surging over 300% so far this year.
The stock hit a record high of ₹6,287.95, gaining as much as 7.1%. At 9.20 am, the scrip was trading at ₹6,283 on the BSE, up 7% with its m-cap at ₹1.01 trillion.
Earlier, PSU stocks such as State Bank of India, Coal India, NMDC Ltd, Indian Oil Corp. Ltd, Power Grid Corp. Ltd, SBI Life Insurance, Bharat Petroleum Corp. And SBI Cards have achieved this milestone.
IRCTC listed on 14 October 2019 on exchanges and its issue price was ₹320 a share. Since then, the stock has surged over 18-fold or 1,737%. So far this year, it has gained 308.1% and so far this month it has advanced 58%.
Analysts said IRCTC is expected to recover in a robust fashion, with covid cases coming under control and the vaccination drive continuing to remain strong as the economy unlocks across India. The impact of the third wave of the pandemic also remains uncertain.
“IRCTC as a company is a pure monopoly business and the recent surge in stock prices is giving great reward to shareholders on the back of unlocking the economy and upcoming festival season which will boost the company’s revenue,” said Akhil Rathi, vice president, advisory, at Marwadi Financial Services.
Despite challenges from the second wave, IRCTC delivered strong numbers in June quarter as catering segment revenues improved, rail-neer segment turned EBIT positive after four quarters and internet ticketing segment continues to deliver strong margins.
“Internet ticketing saw a jump in Q1 due to low base last year; we expect this segment will grow substantially higher in the second quarter at about 50% compared with Q1. Also, the number of trains will increase which will increase the revenue for Rail Neer and Catering services” Rathi added.