IRCTC shares extend fall after leadership rejig; what's next: Rs 600 or Rs 700?

Shares of Indian Railway Catering and Tourism Corporation Ltd (IRCTC) on Friday fell for the second consecutive session. The stock today slipped 0.59 per cent to close at Rs 645.50 on BSE. The Indian Railways' PSU has appointed Seema Kumar as Chairman and Managing Director (CMD). The leadership change was announced after Rajni Hasija completed her tenure as Director (Tourism & Marketing) of IRCTC. "Owing to her superannuation, she also ceases to hold the additional charge of the post of CMD," IRCTC stated. Further, Kamlesh Kumar Mishra has been given the additional charge as IRCTC Director (Tourism & Marketing).

On the earnings front, the company posted healthy fourth-quarter (Q4 FY23) results. The IRCTC Board also recommended a final dividend of Rs 2 per equity share of the face value of Rs 2 for FY23, whose entire paid-up share capital would be Rs 160 crore. "This final dividend is in addition to the interim dividend of Rs 3.50 per share declared by the Board in the month of February 2023 and already paid to the shareholders," the company said in an exchange filing.

"IRCTC presented a strong set of numbers in the fourth quarter where revenue increased by 39 per cent and PAT (profit after tax) increased by 30 per cent. Margins also looked good at 34 per cent. The stock traded at 52x its EPS (earnings per share) which puts the valuation on a higher side," said Ravi Singh, Vice-President and Head of Research at Share India.

Analysts largely remained mixed on the counter. One of them said the stock may witness selling pressure in the near term, while some suggested buying the dips while keeping the stop loss placed.

On the technical setup, Share India's Singh said, "The stock may witness selling pressure in the near term and can touch Rs 620."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has bottomed out near Rs 560 zone and given a decent pullback towards Rs 630 levels where the stock has been in consolidation. We suggest buying and accumulating the stock for an upside target of Rs 727 while keeping the stop loss placed at Rs 605."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "One can buy in the zone of Rs 645-650 with an upside target of Rs 700 and stop-loss would be Rs 624."

AR Ramachandran from Tips2trades said, "IRCTC has strong resistance at Rs 660 on the daily charts. A daily close below support of Rs 640 could lead to lower targets of Rs 604-578 in the near term."

VLA Ambala, Research Analyst at Stock Market Today, said, "According to daily charts, Rs 600 to Rs 550 is a support range for the stock. Going ahead, we may see targets between Rs 680 and Rs 810. That said, a strict stop loss must be kept at Rs 540."

Meanwhile, Indian equity benchmarks traded higher today, pausing their two-day fall. The domestic indices turned positive, led by gains in banks, metals, consumer, pharma and automobile stocks. The 30-share BSE Sensex pack rose 119 points or 0.19 per cent to close at 62,547, while the broader NSE Nifty index moved 46 points or 0.25 per cent higher to settle at 18,534.

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