IRCTC share price breaches Rs 4000 mark, up 1155% from issue price - check why analysts are skeptical about this counter

Surging since the start of the September series, Indian Railway Catering and Tourism Corporation (IRCTC) shares have hit a new all-time high of Rs 4017 per share after rallying for over 6.5 per cent on the BSE intraday trade on Friday on the back of heavy volumes.

The stock alone in September has gained 46.5 per cent, while it has spurted over 1155 per cent from its issue price of Rs 320 per share. While it has soared 17 per cent in the last four sessions.

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The continuous surge in the public sector unit stock has made almost all analysts skeptical, as the majority of them say the counter has been overvalued, and even on technical terms the scrip looks absurd. However, they expect huge gains from this stock on a long-term basis.

Quoting IRCTC shares as a good stock, TradeSwift’s Director and Zee Business analyst Sandeep Jain says the surge in the stock is mainly driven by unlock theme as traveling across country is getting normalised, however, he says the valuations of the counter are too high in the sense it being a PSU.

Banking on the monopoly, Jain says IRCTC is a new economy business and there are other good stocks too in the segment, such as MakeMyTrip and Easy Trip. These shares too have huge potential; however, their prices are not surging the way IRCTC is, probably because of the monopoly enjoyed by IRCTC.

The scrip has been performing beyond the analyst’s expectations as he had never thought the stock would breach Rs 3500 per share level so early. He suggests investors to hold the stock and make fresh buy on dips.

Similarly, another market analyst Simi Bhaumik says the stock has outperformed her expectations and she thinks it would grow to Rs 5000 per share levels by December 2021 and reach Rs 10000 per share mount in the next 2-3 years. She even believes the monopoly and unlock story for the stock has been playing well, while the stock so far has hit all her targets.

On the technical front, the market analyst Sacchitanad Uttekar says the stock is too stretched on price charts and he is not really optimistic. Uttekar is surprised with the last 20 per cent surge in the stock. He believes one has to be very cautious, given has the technical zone the shares are trading currently.   

Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.