Nilesh Jain says immediate support on IRCTC share is now placed at Rs 1660

IRCTC share price today is Rs 1695, up Rs 6 or 0.4%. Laurus Labs share price has moved down over 3% from Rs 1751 to Rs 1694 in the last one week. IIFL Securities initiates coverage on IRCTC with target price of Rs 2174. The key near-term risk is the rising Covid cases and a delay in recovery; but IRCTC’s low fixed-cost model and healthy net-cash position lend comfort. Medium-term risks are change in scope of catering by the Ministry of Railways and potential adverse regulation as GoI’s stake in IRCTC comes down.

IIFL Securities estimate 24% EPS CAGR in FY20-23, driven by:

1)     Accelerated adoption of online ticketing

2)     Conversion of unreserved coaches to 2S class

3)     Increase in capacity in the PDW (packaged drinking water) segment

4)     Resumption of private trains

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Technical Analysis ON IRCTC:

Technical Analyst Nilesh Jain, who is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking says that IRCTC is making a lower top and lower bottom formation on the daily time frame and to negate this pattern it has to take out Rs 1780 levels on the higher side. The immediate support is now placed at Rs 1660 and below that it can test Rs 1600 levels.

Annual Report Highlights:

Indian Railway Catering & Tourism Corporation Ltd (IRCTC) is the only entity authorized by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

IRCTC aims to establish itself as a leader in the area(s) of hospitality services, Travel and Tourism, packaged drinking water, and Internet Ticketing by providing value added products and services for passengers, tourists and other customers, targeting IR and Non-IR related services alike and building a resilient business portfolio that is scalable and based on core competence.

Apart from having a dominant market share in Indian Railways, we have diversified our offerings by foraying into non-railway segments including air ticket booking, e-catering, tour packages, executive lounges and budget hotel booking. IRCTC’s endeavour is to be a one stop-solution for all types of travel needs and be the preferred travel booking partner.

IRCTC has a track record of delivering consistent growth in revenue and profitability. On the back of favorable regulatory policies and growing passenger traffic, our top line and bottom line are expected to witness sustained growth in the long run.