2 Indian Railways Stocks! After Multibagger IRFC's Dividend, Watch Out For IRCTC Shares On November 17

Indian Railways-backed two stocks have been in focus this month for their dividend rewards to shareholders after Q2 results. These are Indian Railway Finance Corporation (IRFC) and IRCTC. While multi-bagger stock IRFC turned ex-dividend recently, the focus has now shifted toward IRCTC. On Thursday, IRFC shares traded flat but IRCTC stock was near its intraday high. IRFC is Prabhudas Lilladher's technical pick, while IRCTC shares are recommended on hold by the brokerage.

On Thursday, at the time of writing on BSE, IRFC shares traded at Rs 73.5 apiece broadly flat compared to the previous closing. The stock gained by nearly 0.6% with an intraday high of Rs 95,818.29 crore.

Meanwhile, IRCTC shares traded near their day's high of Rs 679.75 apiece on BSE with a market cap of over Rs 54,100 crore.

Year-to-date, IRFC shares rallied by nearly 123% on BSE, while IRCTC has seen a single-digit upside of over 5.3%.

Last week, IRFC shares turned ex-dividend on November 10 for an 8% interim dividend for FY24. This record date was to determine eligible shareholders for the dividend benefits. IRFC declared an interim dividend of Rs 0.80 per share having a face value of Rs 10 each. I

That being said, it is now IRCTC's turn to steal the limelight. As per the regulatory filing, IRCTC declared 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 will be 125% and in value terms will be to the tune of Rs 160 crore. IRCTC fixed Friday, November 17, 2023, as the record date for payment of Interim Dividend of the FY 2023-24.

On IRCTC, Prabhudas Lilladher earlier said, "We re-align our EBIT margin assumptions for catering division resulting in a marginal EPS upgrade of ~1% over FY24-FY26E. Indian Railway Catering & Tourism Corporation (IRCTC IN) reported better-than-expected operational performance with EBITDA margin of 36.8% (PLe 34.0%) led by a beat in catering segment. We believe catering division has earnings optionality arising from 1) tie-up with Zomato 2) managing trains/coaches booked on full tariff rate (FTR) 3) ~200 contracts that are in pipeline and 4) expected onetime gain arising from increase in license fee which has been pending as the matter is sub-judice. We expect PAT CAGR of 11% over FY23-FY26E given 1) traction in non-convenience revenue 2) rail neer expansion and 3) healthy growth in catering segment."

However, further on IRCTC, PL's note said, "we believe valuations at 43x/41x for our FY25E/FY26E EPS estimates price in most of these benefits and thus we maintain our 'HOLD' rating on the stock with a TP of Rs709 (45x FY25E EPS; no change in target multiple)."

On the other hand, IRFC is among the technical picks of Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher. Parekh earlier said, "The stock has indicated a trend reversal from that level and has improved the bias to anticipate further upside in the coming days. The RSI also has reversed from the oversold zone and has signalled a buy. We suggest to buy and accumulate the stock for an upside target of 90 levels keeping a stop loss near 64."

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.