IRCTC share continued its bullish run for the second consecutive session today after the Railway PSU made a bumper debut on BSE and NSE yesterday. IRCTC share price opened 1.15% higher at Rs 737 on BSE compared to the previous close of Rs 728.60. The stock subsequently hit a fresh high of Rs 748.90 in trade today.
Similarly on NSE, IRCTC stock started 0.72% higher to Rs 733 compared to the previous close of Rs 727.35. On NSE too, the stock hit a new high of Rs 747.40. Market capitalisation of IRCTC stock stood at Rs 11,726 crore on BSE.
On Monday, the PSU made a blockbuster debut on BSE listing 103% higher at Rs 644 compared to the issue price of Rs 320. The 'Travel Support Services' stock with a face value of Rs 10, made an intraday high of Rs 743.80 and a day's low of Rs 625 on BSE yesterday. The stock closed 127.69% higher at Rs 728.60 against the issue price. It closed 13% higher against the listing price of Rs 644 on BSE.
On NSE, IRCTC listed with gains of 95% at Rs 626 compared to the issue price of Rs 320. IRCTC share made a day's high of Rs 743.80 and a low of Rs 625 on NSE. The stock closed 17% higher against the listing price of Rs 626 on NSE.
Analysts say IRCTC stock is long-term story and advise investors to hold the share.
Vinod Nair, head of Research at Geojit Financial Services said, "We suggest to hold the stock in the medium-term in-spite of doubling of the valuation post the fantastic listing. The IPO offer price of the company was very attractive, and it is very difficult to have such quality and clean businesses in this difficult equity market. Pure monopoly and restarting of convenience fee on online ticket booking will improve the prospects of the company in the future.
The margin for internet ticketing is expected to be high at around 65% which was revoked by the ministry post demonetisation to boost online transaction. The other reason to hold the stock is due to high demand for such companies and low free float in the market, which leads to premiumisation during such times."
Arafat Saiyed, Research Analyst at Reliance Securities has a hold recommendation on the stock. He cites the firm's healthy balance sheet and monopoly for long-term view in the stock.
"The IPO was subscribed by 112 times making it the most successful IPO by a PSU and also the most successful IPO in last 18 months. IRCTC operates one of the most transacted websites in the APAC region with an average monthly transaction volume of 25-28 mn. Indian Railway has restored convenience for e-ticket from September 19, which was discontinued for some time.
With an average monthly 25 mn ticket booking, this is likely to generate additional annual revenue of Rs 450 crore. IRCTC is sole licence holder for catering and online ticketing for the Indian Railways. It is exclusively authorised to manufacture and supply packaged drinking water at stations/trains. IRCTC is in a steady business model, which is likely to grow at 12-15% in the next few years. The company has a healthy balance sheet with over Rs 1,100 crore in cash to support capex. IRCTC has good dividend pay-out track record, as it paid 50% average payout in the last 3 years."