Railway Stocks Buzz: Prabhudas Lilladher Gives Intraday Buy Call On IRCTC Share Price For Rs 1,005 Target

Indian Railways catering services provider, IRCTC is recommended to buy on February 7 for a target price of Rs 1,005 by Prabhudas Lilladher in the intraday trade. Year-to-date, IRCTC shares have gained over 8% on BSE, while its performance is robust with double-digit gains of 48% in six months.

For the February 7th trade, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher recommended BUY on IRCTC share price. The analyst suggested buying at Rs 965 apiece, to fetch a target price of Rs 1,005 in the day, while the stop loss is recommended at Rs 946 apiece.

At the time of writing, IRCTC's share price traded at Rs 965.45 apiece on BSE. At the opening bell of February 7, the stock's day high and low were at Rs 972.90 apiece and Rs 963.75 apiece respectively.

IRCTC's market cap is over Rs 77,200 crore.

In a year, IRCTC shares have gained by a whopping 51% on BSE to date. The 24-year-old Miniratna is also among the top dividend-paying stocks in the railway segment.

At the current market price, IRCTC has a dividend yield of 0.57%. So far in FY24, the company delivered a dividend payout of 125% amounting to Rs 2.50 per share. In FY23, the dividend payout was to the tune of 275% aggregating to Rs 5.5 per share.

The company is set to announce its Q3FY24 results on Tuesday, February 13, 2024. The company 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.

At present the company is managing catering services for various Ministries, Government Departments, and Autonomous Bodies including Judiciary and Universities. The company has already set up its hospitality outlets in 9 such organizations including the Department of Telecommunications - New Delhi, Calcutta High Court, UP Secretariat - Lucknow and so on.

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.

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. IRCTC also eyes major non-catering services on a PAN-India basis.

IRCTC is now on the road to proliferate in the areas of business beyond Railways for promoting its brand and business across the nation. The company is also expected to benefit from the funds allocation in the interim budget.

As per Trendlyne data, EPS is expected to grow by 20.9% in FY24. Some of the positive fundamentals for stock analysis are:

- Stock Price rose 52.04% and outperformed its sector by 4.79% in the past year.

The debt to Equity Ratio is zero as the company is debt-free.

- Mutual Fund Holding increased by 1.39% in the last quarter to 2.43.

- Return on Equity(ROE) for the last financial year was 40.58%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

- Interest Coverage Ratio is 86.68, higher than 1.5. This means that it can meet its interest payments comfortably with its earnings (EBIT).

- Promoter Pledges are zero.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or 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.