IRCTC shares clocked single-digit returns in two years; where is the railway stock headed?

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) have delivered low returns of 7% in the last two years. IRCTC shares, which closed at Rs 794.40 on December 20, 2021 were trading at Rs 854 today, clocking 7.5% returns during the period. BSE 100 index of which IRCTC is a component, surged 27.85 in two years. In the current session, IRCTC stock climbed 5.4% intraday to Rs 860 against the previous close of Rs 815.55 on BSE. The railway stock opened lower at Rs 801.65. Total 12.20 lakh shares of the firm changed hands amounting to a high turnover of Rs 102.55 crore on BSE. Market cap of IRCTC rose to Rs 68,548 crore.

The IRCTC stock fell to a 52-week low of Rs 557.15 on March 29, 2023 and touched a 52 week high of Rs 916.35 on December 19 this year.

Kkunal V Parar, VP of Technical and Algo Research, Choice Broking said, "As per the price structure, the stock had given a breakout of trading range of 220 points, which is from Rs 560 to Rs 780 levels. The stock had surpassed and traded above all its key Moving Average on the Daily-Weekly-Monthly Time Frame which shows the strong upside potential of the stock. The stock will face a small hurdle near its Round Number Resistance of 900 level and the key support level is placed at Rs 810-800 levels. As per indicators, weekly and monthly, RSI is trading above 70 levels and it is also trading above its 20 Moving Average in all higher time frames which conforms bullish trend in the script. Our view is to buy on dips till Rs 800 levels for further upside of Rs 1,000/1,010 potential target and view will be neglected only below Rs 745 levels."

Abhijeet from Tip2trades said, "IRCTC is bullish but also overbought on the daily charts with next resistances at Rs 895 & Rs 940. Investors should book profits at current levels as Daily close below support of Rs 839 could lead to target of Rs 760 in the near term."

IRCTC stock has a one-year beta of 0.3. This signals the stock has low volatility.

In terms of technicals, the relative strength index (RSI) of IRCTC stands at 62.7, signaling it's trading in the neither in the overbought nor in the oversold territory. The large cap stock is trading higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

IRCTC reported a 30.4% rise in net profit at Rs 294.7 crore compared to Rs 226 crore in the corresponding period last year. Revenue from operations climbed 23.5 per cent to Rs 995.3 crore compared to Rs 805.8 crore in the year-ago period.

On the operating front, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) in the September quarter came in at Rs 366.5 crore, clocking a growth of 20.2 per cent, compared to Rs 304.9 crore in the same period last year.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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