Miniratna Share: Top Dividend Paying Railway Stock Hits New 52-Week High; Should You Buy For Rs 1,000-1,100 TP

Railway sector's rising star, IRCTC has ended the first trading week of 2024, by hitting a new 52-week high. The dividend-paying railway stock is currently above Rs 900 and has given more than 42% of return in a year. The stock is among the top picks for 2024. Technically, the stock has a bullish indicator on its chart. The next target price of new highs for IRCTC is ranging from Rs 1,000 to Rs 1,100.

There is potential upside in the range of 10% to 22% in IRCTC in the near term if the stock price touched either Rs 1,000 or Rs 1,100 target price levels.

On BSE, IRCTC's share price ended at Rs 906.15 apiece, up by 0.6% with a market cap of Rs 72,492 crore on January 5th. On this day, in the trading hours, the stock had touched a new 52-week high of Rs 923.45
apiece.

In its 2024 annual picks report, brokerage Fisdom in its technical outlook for IRCTC said that the company, on the monthly chart, has witnessed a rectangle pattern breakout, and prices are trading above the upper band of the range. Also, the stock has given a range pattern breakout on the weekly time frame, further confirming the longer-term trend.

Further, the brokerage pointed out that the stock is trading above its 21, 50, and 100-week exponential moving average, which adds strength to the current momentum. Meanwhile, the momentum oscillator RSI (14) has given a trend line breakout above 60 levels, then reads higher with a bullish crossover. The MACD indicator is reading above its polarity line with a positive crossover.

IRCTC is a "Mini Ratna (Category-I)" Central Public Sector Enterprise under the Ministry of Railways, Government of India. IRCTC was incorporated on 27th September 1999 as an extended arm of the Indian Railways to upgrade, professionalize and manage the catering and hospitality services at stations, on trains and other locations and to promote domestic and international tourism through the development of budget hotels, special tour packages, information & commercial publicity and global reservation systems. The authorized capital of the company is 250 crores and paid-up capital is 160 crores.

In 2023, IRCTC delivered an interim dividend of Rs 2.50 per share on a face value of Rs 2 each for FY24. In percentage terms, the dividend payout was 125% and in value terms to the tune of Rs 160 crore.

IRCTC has reported a net profit of Rs 294.67 crores in the September Quarter of FY 2023-24 marking an increase of 30.36% from Rs 226.03 crores in Q2 of FY 2022-23. The net profit registered is the highest-ever profit registered by IRCTC in the history of IRCTC for this Quarter. Also, in the quarter, the PSU registered a strong financial performance with an increase in total revenue of 23.51% which stood at Rs 995.31 crores in the September Quarter of FY 2023-24 in comparison to Rs 805.80 crores in Q2 of FY 2022-23. Both EBITDA and PAT ended up at healthy margins of 28.54% and 30.36% respectively.

Last month, IRCTC announced that it eyes a major expansion in non-railway catering bussiness across Pan India. It said IRCTC is now on the road to proliferate in the areas of business beyond Railways for promoting its brand and business across the nation.

As per the regulatory filing, with aggressive plans to further mark its signature in the catering business and customizing to the requirements of clients, IRCTC has already signed MoUs with various government and autonomous bodies including defence establishments such as Border Security Force, Indian Maritime University - Kolkata, Cotton University - Guwahati and so on while the company is in active phase of commissioning 15 more catering units across the country in the near future.

Moreover, IRCTC foresees expanding its gamut of catering operations across the country and is in discussions with various other government organizations and industrial houses for setting up catering units and also offers comprehensive catering solutions in sync with its aim of becoming a premier brand of Hospitality and Catering in the country.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.