On Friday, shares of the Indian Railway Catering and Tourism Corporation (IRCTC) went up by 2.8% to reach Rs 784.50 on the Bombay Stock Exchange (BSE). This increase followed a report from Macquarie, a well-known brokerage firm, that gave IRCTC an ‘outperform’ rating. They set a target price of Rs 900 per share, suggesting that the stock could rise by 14.7% from its current price.
Macquarie pointed out that IRCTC holds a special position as the only company allowed to sell online train tickets and provide catering for Indian Railways. They believe that plans to modernize the railway system and introduce premium trains could significantly boost IRCTC’s growth. The firm estimates that with India’s railway modernization plans, the stock could potentially double in value!
IRCTC has strong financial health, boasting a free cash flow margin of 30% and a return on equity and invested capital above 30%. As the only company authorized to offer online tickets and catering services, IRCTC has helped improve railway services. They run one of the most frequently used websites in Asia-Pacific and have expanded into areas like non-rail catering, e-catering, executive lounges, and budget hotels, aiming to serve customers better.
However, IRCTC’s shares have faced difficulties, dropping over 25% in the last six months, while the BSE Sensex has only fallen about 3% in the same period. Just before this recent rise, the stock closed at Rs 763.50.
In their recent earnings report for the September quarter, IRCTC announced a 4.48% rise in net profit, reaching Rs 307.86 crore compared to Rs 294.67 crore last year. Revenue from operations grew by 7.2%, amounting to Rs 1,064 crore, and their other income jumped by 27% to Rs 59.97 crore.
(Disclaimer: Opinions and recommendations made here are from experts and may not reflect the views of Niftystat.)
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