For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Buy This Multibagger Miniratna Stock For Target Price Of Rs 804: IDBI Capital

|

ICICI Direct in its recently published report on Indian Railway Catering and Tourism Corporation Limited (IRCTC) has suggested buy the stocks of the company. The brokerage estimated a target price of Rs 804 apiece for the stocks of the company. Considering this, if an investor buys the shares of the company at the current market price of the stock, the investors can expect a potential gain of 21% in 12 months.

 

IRCTC Ltd is a large-cap Miniratna Category 1 company having a Market Capitalization of Rs 53,452 crore.

Stock Outlook & Returns

Stock Outlook & Returns

The current market price of IRCTC stocks is Rs 668.15 apiece. The Current Market Price is Rs 161.04 above the 52 week low and Rs 611.11 below the 52 week high, respectively.

The 52-week low of the stock is Rs 507.11 recorded in August 2021, and the 52-week high is Rs 1279.26 recorded in October 2021, respectively. ROE is 35.22%.

Stocks over the past 1 week have jumped roughly 1.47% and in the past 1 month 13.01%, respectively. In the past 3 months, the stocks moved up by 2.2%. In the past 1 year, it has given a positive return of 27.04%. It was listed on the exchange in October 2019, and since then it has delivered multibagger returns of 359.05%.

Revenues to report robust growth
 

Revenues to report robust growth

The brokerage said, "We expect catering to drive growth led by higher pricing in cooked food (leading to higher license income) and opening of economy. Moreover, addition of license revenue from new ventures (retiring room up-gradation) would further improve catering income. This coupled with increase in travelling will boost tourism revenues. Further, with increased internet ticketing penetration and higher rail neer revenues prompt us to remain positive on the long term prospects of the company."

EBITDA margin to taper but remain robust

EBITDA margin to taper but remain robust

The decline in Q1FY23 EBITDA margins was mainly led by higher contribution of catering revenues. "We believe higher contribution from catering and tourism will dent margins in long term. Hence, we have lowered our EBITDA margin estimates by 535 bps and 287 bps for FY23E and FY24E, respectively," the brokerage said.

Catering & Tourism to drive revenue growth

Catering & Tourism to drive revenue growth

According to IDBI Capital, "IRCTC continued to log robust revenue growth and were above our estimates. Profitability observed some drag due to increase in catering revenue and decline in internet ticketing margins (down 700 bps QoQ). In the longer term, the company will benefit from increased license income in catering as it returns to pre-covid levels. In addition, with increased acceptance of online ticket booking, we expect internet ticketing to remain robust. Further, tourism is also expected to improve led by increase in travelling. The company's focus on e-catering initiatives and increasing revenues from advertisement & license fees bodes well for long-term profitability. Hence, we maintain our BUY rating with a target price of Rs 804/share (PE of 57x on FY24E EPS)."

About - Indian Railway Catering and Tourism Corporation Limited (IRCTC)

About - Indian Railway Catering and Tourism Corporation Limited (IRCTC)

Indian Railway Catering and Tourism Corporation Ltd. (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. It's registered and Corporate Office is situated at New Delhi

Disclaimer

The stock has been picked from the brokerage report of IDBI Capital. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

Story first published: Tuesday, August 16, 2022, 22:45 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X