IRCTC share price remains the subject of research not only among investors but also among traders.

[update on 13 August 2021]

But today the success of IRCTC share price has become well known. The business height and popularity of the company was estimated with the arrival of the company’s IPO in October 2019.

Perhaps one of the main reasons for this was that people were optimistic about the company’s future and the company’s monopoly.

It was but natural. Because still there is no other listed company in Indian Stock Market except IRCTC which is engaged on the same line of business and such a large scale of operations under the Indian Railways. Which is also on the tongue of foreign tourists including all Indians.

Let us study afresh about IRCTC company and its share price today. And yes, I am sure this time also you will be benefited again after reading this post.

IRCTC Share Price News

1. The board of Indian Railway Catering and Tourism Corporation (IRCTC) on 12 August 2021 recommended the proposal for sub-division or split of company’s one (1) equity share of face value of ₹10/- each into five (5) equity shares of face value of ₹2 each, subject to the approval of Ministry of Railways, shareholders and other approvals. (Source: LiveMintdotcom)

Stock split is an important event which is done usually, when the shares of a company become very expensive. Because then small investors are not able to invest in those shares. Therefore, the company resorts to stock split i.e. share split to attract small investors towards its shares.

This is the reason why IRCTC stock reached its all-time high of ₹2,728.85 on NSE yesterday on 12 August.

2. Indian Railway Catering And Tourism Corporation Limited has submitted to the Exchange, the financial results for the period ended June 30, 2021. We will analyze this result in next post.

Introduction to IRCTC Company

The Indian Railway Catering And Tourism Corporation Limited also popularly known as IRCTC was incorporated in the year 1999 under Ministry of Railways to upgrade and professionalise catering services over Indian Railways and also to promote Railways as a kaleidoscope of tourism across the country.

Source: https://www.irctc.com/

And in fact IRCTC has become a company capable of meeting all the objectives for which it was created.

IRCTC deals with Central Public Sector Enterprises.(CPSEs), which has the status of a Miniratna company provided by the Government of India.

IRCTC SHARE PRICE – Best Stock Analysis and Forecast

Here, my effort is not only to tell you about irctc share price but you will also learn how to do fundamental and technical analysis of any stock.

Meanwhile, I suggest that you should read both these posts related to Fundamental analysis of stocks and how to analyze the balance sheet of a company.

As you know fundamental analysis should be started at three levels.

1. At the level of whole economy – If we talk about the entire economy of the country, then it clearly seems that India’s economy has picked up the pace of growth again.

The economy of almost every country has been badly hit by measures like the lockdown taken to prevent the spread of the COVID-19 disease. But we can hope that soon this will be brought under permanent control.

2. At the level of industry – Since IRCTC at the industry level is related to an important sector, commercial services sector. Hence its demand is going to be constant. Also there are no industry peers to compare with IRCTC.

3. At the level of specific company – IRCTC is truly a unique company at this stage. To know the characteristics and shortcomings of the company in this context, let us first do a qualitative fundamental analysis.

Business Model of IRCTC

The list of features of irctc is quite long. Here is a brief description.

IRCTC has diverse businesses as well as specialized capabilities. It is already in the main four businesses, with India’s first private train “Tejas Express” running from 4 October 2019. And it is set to run more private trains.

1. Catering and Hospitality– However it is the first business model of IRCTC which has given the company the highest revenue up to 54.99% in FY 2018-19. Nevertheless, IRCTC is, surprisingly, less famous for catering services and more for online ticket booking for railway travel.

It is operating under three segments of catering-

  • Mobile Catering– Where the company serves food during your journey within the train.
  • Stationary Catering – Where they operate and manage various food plazas, Jan Aahaar and food stalls on railway platforms.
  • e-Catering– Where you can order your favorite dishes during the journey through their e-portal.

2. Travelling and Tourism– The second business is travelling and tourism. Which has generated 23.38% revenue in FY 2018-19. Of which, the company’s special business segment, State Teertha, accounted for 10% of the revenue.

3. Online Ticket Booking/ e-ticketing – Generally people know IRCTC for online railway ticket booking only. Where the company’s website irctc.co.in has about 25 to 28 million transactions in a month on normal days. While the revenue derived from this was only 12.35% in FY 2018-19. 

4. Packaged Drinking Water Segment – it is the last business model of IRCTC under which the popular drinking water brand ‘Rail Neer’ is manufactured and distributed  at all stations and trains. It has generated revenue up to 9.28% in FY 2018-19.

Management Processes

The company’s past performance and growth rate reflect its good management. The Chairman and Managing Director of the IRCTC is Mahendra Pratap Mall since September 2017. The company has competent and experienced Board and senior management team. They are developing all-round.

Companies’ Environment

The employees and officers of the company are working in a very healthy and inspiring environment, taking it to new heights of success. Around 1598 permanent employees are working here.

Competitiveness

It would be interesting for you to know that IRCTC is the only entity authorized by the Ministry of Railways to provide every service in its business segment.

The company has been trying to make its products and  services world class by adopting new technologies required from time to time, with robust operating systems and internal controls.

That is why it has received many awards and accolades in the past for outstanding work such as Most Trusted Brand in Railways Service Provider India Pride Awards 2014-15, World Travel Awards 2015, etc. List for the year 2016 – 2017.

It has also been honored in the Fortune India Next 500 list for the year 2016 – 2017.

Shortcomings of IRCTC

Despite the many merits, some of the risks and concerns associated with IRCTC are as follows- (I think its feasibility is quite low. But it is important for you to know these things as well.)

1.The outstanding litigation amounts/ contingent liabilities pending under the court is quite high. However, it is not necessary that the company loses all these matters, nor is it possible to settle all these cases in one financial year. Therefore it is less important for investors.

2. The company is governed entirely under the policies and decisions taken by the Government of India / Ministry of Railways.

3. The mutual funds decreased their shareholdings in the previous quarter by 2.73%.

4. The current pathetic situation is not favorable to the company because of COVID-19. The maximum turnover of IRCTC is non-functional since  March 22, 2020 and hence there is a hurdle in net cash generation.

Quantitative Fundamental Analysis of IRCTC

The wait is over for Indian Railway Catering & Tourism Corp Ltd.- IRCTC Q4 Results 2020 on July 10, 2020.

Visit to read- IRCTC Q4 Results 2020 & Dividend: Time to Analyze the Best

As you know, in quantitative fundamental analysis we try to read and understand the financial statements and financial ratios given in the annual report of the company. Which gives the future prospects of the company.

If you look at the data for the last five years (excluding FY 2019-2020), you get –

  • The company’s share capital Increased from Rs. 20 cr to Rs. 160 cr. Although, the increase of share capital is not considered good. But here it is probably due to the issue of bonus shares by the company.
  • The company’s reserves have more than doubled in five years. But it is also due to bonus shares that FY19 has not increased much compared to FY18.
  • The best thing for investors is that the company is completely debt free.
  • The value of all important elements of profit and loss statements such as net sales, net profit, employee costs, and PBIT (Profit before Exceptional Goods and Tax) have gone up (excluding consumption of raw materials which are not much significant).

Financial Ratios Analysis- IRCTC Share Price

Financial  ElementsValueRemark
Scrip code and symbols nse: IRCTCbse: IRCTC (542830)
IRCTC share price today (August 12, 2021)  nse: 2689.80bse: 2689.85
52-WEEK HIGH  2728.8512 Aug 2021
52-WEEK LOW1290.05Aug 2020
Latest Dividend (Rs) ₹ 2.50 
Latest Dividend Date   Oct 19, 2020 
Dividend Yield (%)   0.19% 
Promoter holding 87.40% 
 Market Cap (Rs Cr)41,156 crore 
Face Value (Rs)    10.00after stock split Rs 2
EPS (TTM) (Rs)    26.62* 
P/E Ratio (x)   increased from 52.49* to 216.72indicates the current situation weak but the future having good prospectus (achieved)
Industry P/E    44.57 
P/B Ratio (x)    31* 
Profit Growth    17.49%av. of 3 years
ROE    29.46%av. of 3 years
EV/EBITDA    45.32Over-valued
PEG Ratio    1.52Either hold or sell at CMP

IRCTC Share Price History

The IPO of IRCTC was open for subscription between September 30, 2019 to October 4, 2019. Which was oversubscribed at a price band of Rs. 315-320 per share.

The shares were listed on both the stock exchange, NSE and BSE on October 14, 2019. But on the day of listing, the opening price of the share price was 624. The lowest price of the stock that day was 625. This is the lowest price ever.

Intrinsic Value of IRCTC Share Price

Calculated by Benjamin Graham’s Formula:

Intrinsic Value = [EPS x ( 8.5 + 2g) x 4.4]/Y

When we take EPS(ttm) = 26.62; g= 17.49 and Y= 6.5, it gives

intrinsic value of IRCTC share =783.50

Also, Intrinsic Value Per Share = 783.50, when calculated by Graham-Calculator of  TradeBrains. It also states that the stock price is overpriced.

IRCTC Share Price Chart

IRCTC

Image source: Investing.com

Technical analysis of this stock on July 7, 2020 at CMP 1397.40 indicates the following important points-

  • The Bollinger bond is narrowing. This means a breakdown or breakout is to come.
  • The 200-day EMA is not available. And the stock price is close above the 50-day EMA of 1374 but below 20-day EMA of 1407.60. Closing above or below will decide the short term trend.
  • The RSI and stochastic values are 50 and 36, respectively. Let them reach near 30 and 20 respectively to buy for long term.
  • Technical indicators are not able to tell if the share price is overbought or oversold.

IRCTC Share Price Target and Forecast

People’s behavior is repetitive. Both investors and traders do the same. For these reasons, the level of share price also starts to be determined. Since the listing of IRCTC on the stock exchanges has not happened for even a year.

In such a situation, its long term target and forecasting is a difficult task. Here I believe that you should only trade and invest level wise in IRCTC’s shares.

With the help of my own stock calculator, the targets calculated for this financial year of IRCTC share price are as follows:

 Target1Target2Target3Target4
above 1198 UPTREND Targets1490156824264911
below 775 DOWNTREND Targets775623592383

Let me answer some of your questions which will be useful for you.

Can we buy IRCTC shares in trading? What is its scrip name?

Yes, you can buy IRCTC shares for intraday trading and for swing trading. But this stock is not yet involved in Futures and Options trading (derivative segment).

Its scrip name is IRCTC used at NSE and BSE Code is 542830.

What will be share price of IRCTC in one year?

IRCTC share price should be in between 625 to 2426 in FY 2020-21.

Is it worth buying IRCTC share at current market rate?

If the company starts functioning fully, then IRCTC can be purchased at any price for long term investment. It is an excellent stock for trading as well as investment.

But according to Sir Warren Buffett the real profit is when you buying the stock. So wait. When buying, the share price either be around intrinsic value (Rs. 784) or start moving above any support level for example at the level of 1190.

Is it good to take shares of IRCTC at 727 points?

Absolutely, it is good. How happy it would be if I get to buy IRCTC shares at a rate of Rs. 727! Hardly so!

Conclusion

However, what I have discussed above is a good way to invest in stocks. Since then, the risk of your investment decreases significantly. And you are able to be a successful investor. But don’t make it complicated.

As far as I remember, after the lockdown on 22 March 2020, the IRCTC company has not been able to fully conduct its business. Train operations are almost completely closed. About four months of the new financial year are about to pass.

It is but natural that the company’s earnings are going to be badly affected. It may be that the IRCTC share price did not meet your expectations. No hurries. Continue to invest wisely in good stocks like IRCTC at a reasonable price.

Loved the post and if you have some more time, do share and comment.

Disclaimer: The opinions and calculations expressed within this post are the personal opinions of the author. The facts and opinions appearing in the post does not assume any responsibility or liability for any type of losses. Do backtesting. Author is not an expert of Stock Market. The name of the company appearing here is for educational purposes only. Please discuss with your own teacher/ market experts/fund manager/portfolio manager or advisor before making any investments or trading.

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