IRCTC Dividend, Q4: Highest 41% ROE Railway Stock Trending Near 52-Week High, In Focus This Week; BUY/SELL?

Indian railways catering services provider, IRCTC is trending near its 52-week high. In the trading week from May 27th to 31st, this top railway stock will be in focus due to its Q4 results and dividend recommendations. HDFC Securities has maintained a positive bias on IRCTC. On year-on-year basis, IRCTC is expected to report double-digit growth in PAT and revenue in Q4FY24.

IRCTC Share Price:

On NSE, the stock price ended at Rs 1,107.90 apiece, down by 1.3% on May 24 with a market cap of Rs 88,632 crore. Despite this fall, IRCTC shares ended the weekly session of May 20 to 24th on a positive note with gains of nearly 6%.

IRCTC shares are nearing their 52-week high of Rs 1,138.90 apiece, while it is currently up by 80% from its 52-week low of Rs 614.35 apiece.

IRCTC tops other railway stocks when it comes to return on equity (ROE) and return on capital employed (ROCE). The company has the highest ROE of 40.6% and ROCE of 55% in the sector, making it an attractive bet. Among other key positives of IRCTC is that its Debt to Equity Ratio is zero, which means the company is debt-free, while promoter pledges are zero.

Also, both mutual funds and global investors have been increasing their stakes in IRCTC. As of March 31, 2024, FIIs/FPIs have raised holdings to 8.08% from 7.34% as of December 31, 2023, while mutual funds increased their stake to 2.97% from earlier 2.43%.

IRCTC Q4 Results:

In its regulatory filing, IRCTC announced that on May 28, 2024, its board of directors will consider and approve the Yearly Audited Financial results of the Company for the period ended March 2024 and Dividend.

For IRCTC, in Q4FY24, Dolat Capital said that revenue growth of 2.9% QoQ. OPM to decline marginally by 34bps QoQ absorbing the absence of Rs145mn one-time charge of Q3. PAT is expected to decline by 1.8% QoQ.

Accordingly, Dolat Capital expects PAT at Rs 294.5 crore in Q4FY24, up by 29.7% YoY and 1.8% QoQ. While revenue is likely to come at Rs 1,150.3 crore, up by 19.2% YoY and 2.9% QoQ. Among the key monitorable in Q4 will be IRCTC's outlook across the business units.

IRCTC Dividend:

IRCTC is likely to declare a final dividend for FY24 on May 28. If the case is, then it will be an addition to an interim dividend of 125% worth Rs 2.50 per share for the same fiscal.

In FY23, IRCTC paid dividends up to 275% amounting to Rs 5.5 per share.

IRCTC Share Target Price:

Dolat Capital has recommended ACCUMULATE on IRCTC shares. While HDFC Securities has suggested BUY for a target price as high as Rs 1,120. This target price is valid till June 2, 2024, as per HDFC Sec.

This Mini Ratna was incorporated in 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.

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.