IRCTC ( NSE: IRCTC) gave nearly 50% return in just 3 months. The stock made a low of Rs. 635 and a High near Rs 1049 gaining approximately 65% return from its low price.
Railway stocks like IRCTC have given a decent rally in the past few months, some stocks like IRFC have doubled in the past few months. Not only Railway stocks but the whole PSU sector had shown a good rally. IRCTC has outperformed the Nifty in the past 3 months.
Since last month a mild sell-off can be seen in shares of IRCTC. This is possibly due to profit booking and overall selling by FIIs in the Indian Market.
About IRCTC
IRCTC ( NSE: IRCTC) is a Monopoly stock since they are the only platform that has rights in the business of the Railway ticketing and tourism industry. IRCTC is an Indian Railway Catering and Tourism Corporation in the business of Catering, Ticketing and Tourism and a Public Sector Undertaking. It was listed in 2019 on both BSE and NSE.
In the Era of Online ticket booking IRCTC may benefit a lot and an increase in the Railway network will also boost IRCTC’s revenue in future. Even IRCTC may benefit from an increase in Catering business and tourism in India.
Reasons behind the Rise in IRCTC
A major reason for the rise in IRCTC is rapid movement in the whole PSU Sector. This sector has doubled in the last year. All railway stocks have been rising due to low valuation and good Future in Indian Railways.
The Government of India is also keer on the development of Indian Railways and improving the speed and service of Indian railways. This initiative has led all railway stocks including IRCTC to outperform markets. IRCTC is also a monopoly company so it gets more valuation compared to other companies.
FIIs and DIIs have raised their stake consistently in the past five quarters. This might be a major reason for the heavy demand for IRCTC shares which led to an increase in price.
Should you buy IRCTC at Current levels?
IRCTC shares outperformed the Nifty 50 index by almost double in the last one year. However, IRCTC is a monopoly company and all such monopoly company gets good valuations compared to others.
If FIIs and DIIs continue to increase their stake then IRCTC stock may move further upside from current levels.
IRCTC Sales growth over the years
| Time Period | Sales Growth |
|---|---|
| 1 YEAR | 88.52% |
| 3 YEAR | 16.08% |
| 5 YEAR | 19.28% |
IRCTC Profit growth over years
| Time Period | Profit Growth |
|---|---|
| 1 YEAR | 52.51% |
| 3 YEAR | 25.15% |
| 5 YEAR | 35.59% |
ROE of IRCTC over last few years
| Time Period | ROE% |
|---|---|
| 1 YEAR | 46.26% |
| 3 YEAR | 33.14% |
| 5 YEAR | 34.61% |
