IRCTC Shares Deliver 260% Returns Since Listing: Here's What You Should Do?

Shares of IRCTC on January 30, 2020 touched a new record high of Rs. 1164, surging over 4% in comparison to previous closing price of Rs. 1118.60 on the BSE. For three consecutive days, the stock has been scaling new record highs.

IRCTC Shares Deliver 260% Returns Since Listing: Here's What You Should Do?

In a research report, brokerage firm Prabhudas Liladhar says, "Initiate with a BUY and target price of Rs 1,339 (24x FY22E EPS of Rs 56). Policy uncertainty in catering and reduction/abolishment of service charge are key risks to our call". The company has given a buy rating on the stock with an upside of more than 15%.

From its issue price of Rs. 320 per share, the company has managed to deliver close to 260% return. Also, the company through its drinking water will have the first right to grab the market which remains largely unmet.

The behemoth's e-ticketing and catering arm has been conferred the Mini Ratna award and after the service charges have been hiked and it has started operations as a private train operation, the company's revenue are set to kick off. We expect revenue kicker of Rs 3.6 bn/Rs 6.7 bn in FY20E/FY21E post levy of service charge resulting in a 57.3%/68.7% CAGR in internet ticketing revenue/EBIT respectively over FY19-22E," Prabhudas Lilladher said.

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