IRCTC shares trimmed gains in two years; price targets, technicals, outlook and more

IRCTC shares three months’ returns of 38% surpassed the stock’s two years’ performance by over 100%.

SUMMARY

• IRCTC shares ended 3.07% higher at Rs 964.65 on Friday against the previous close of Rs 935.95 on BSE.
• The railway stock opened higher at Rs 946.70.It gained 3.63% intraday
• In terms of technicals, the relative strength index (RSI) of IRCTC stands at 56.2, signaling it’s trading neither in the overbought nor in the oversold territory.

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) have trimmed gains in the last two years. The railway stock has delivered just 18% returns in two years against a 195.47% rally in three years.

Even IRCTC three months’ returns of 38% surpassed the stock’s two years’ performance by over 100%.

IRCTC stock touched its 52 week high of Rs 1049.75 on January 23 this year. Before the January high, the IRCTC stock last breached the Rs 1,000 mark in mid-October 2021. The stock hit a record high of Rs 1278.60 on October 19 in the same year.

The stock closed 3.07% higher at Rs 964.65 in the preceding session against the previous close of Rs 935.95 on BSE. A total of 7.68 lakh shares of the firm changed hands amounting to a turnover of Rs 73.88 crore on BSE. Market cap of IRCTC climbed to Rs 77,172 crore.

IRCTC stock has a one-year beta of 0.7. This signals the stock has low volatility.

In terms of technicals, the relative strength index (RSI) of IRCTC stands at 56.2, signaling it’s trading neither in the overbought nor in the oversold territory. The large cap stock stands higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

Commenting on the fundamental aspect of the stock, Jinesh Joshi – Research Analyst at Prabhudas Lilladher said, “We expect PAT CAGR of 12% over FY23-FY26E and retain HOLD on the stock with a revised target price of Rs 825 (earlier Rs 749) as we increase our target multiple to 47.5x (earlier 45x; escalation of 5% odd) to account for optionality arising from catering business.”

Riyank Arora, Technical Analyst, Mehta Equities said, “The stock has touched a crucial resistance zone of Rs 970-975 on its daily charts. The overall trend looks positive as the stock continues to make higher highs and higher lows. It is expected that any pullback towards the Rs 930-935 zone would be a good buying opportunity for the stock. With the stock moving above its 5-period and 9-period EMA (Exponential Moving Average), the momentum looks strong, and the stock seems poised for potential targets of Rs 1050 and Rs 1100.”

Shiju Koothupalakkal – Technical Research Analyst, Prabhudas Lilladher said, “The stock after the short correction witnessed from the peak zone of Rs 1050 has bottomed out near the important 50EMA zone of Rs 890 levels, and thereafter has gradually picked to improve the bias. Currently, with a positive candle formation, it has come out of the resistance band of Rs 960 level and technically, with the price well positioned and bias improving, one can anticipate for fresh upward move in the coming days. The next near-term target would be 1,005 level and thereafter with strength sustaining can achieve and re-test the previous peak zone of Rs 1050 level in the coming days. From current rate, one can maintain the near-term support of Rs 915 level.”

Abhijeet from Tips2Trades said, “IRCTC stock price is sideways to bullish on the Daily charts with strong resistance at Rs 994. A daily close above this resistance could lead to target of Rs 1040 in the near term. Support will be at Rs 917.”

IRCTC’s tie-up with Swiggy:

What does this deal mean for the companies?

The partnership between IRCTC and Swiggy is a win-win situation for both. Swiggy will get a boost as it will see a steep rise in demand due to the high passenger traffic in the country, whereas for IRCTC, the tie-up will enhance the passenger experience as the entity will leverage Swiggy’s robust network to offer passengers a diverse array of pre-ordered meals, note analysts. 

IRCTC’s collaboration with the online food delivery platform will help improve the former’s brand image, increase its operational efficiency, and help the state-run entity’s potential expansion, they add.

“IRCTC partnering with Swiggy for pre-ordered meal deliveries will increase convenience for passengers, offer wider food options, and improve its brand image,” said Atul Parakh, CEO of Bigul. 

However, execution is the key, as implementing Swiggy’s delivery network with IRCTC’s operations could be complex and lead to delays or disruptions, the analyst notes. 

Aditya Goela, CFA and co-founder of Goela School of Finance, believes IRCTC’s collaboration with Swiggy marks a significant stride in enhancing the passenger experience, and the strategic partnership leverages Swiggy’s robust network and IRCTC’s established platform to offer passengers a diverse array of pre-ordered meals. 

“From a long-term perspective, it’s a good hold. While it seems to be a bit turbulent for the short to medium term since there are a lot of uncertainties with elections coming up,” said Goela.

Goela added that as the service expands, investors eye the potential growth trajectory of IRCTC shares, anticipating a favourable market response to this innovative venture.

IRCTC shares: What do the technicals suggest?

As per Jigar S. Patel, Senior Manager, Technical Research Analyst, Anand Rathi Shares and Stock Brokers, the stock on the charts is signalling potential strength in the stock’s upward movement.

“The reversal of the daily stochastics from the pivotal 50 levels suggests a shift towards bullish momentum, signalling potential strength in the stock’s upward movement. If the stock manages to close decisively above the resistance at Rs 968, it could pave the way for a move towards the Rs 990 mark in the near term, reflecting a bullish sentiment among investors,” said Patel.

The technical expert added that looking ahead, in the next few trading sessions, the level around Rs 940 is expected to provide credible support, potentially acting as a buffer against downward price pressures and reinforcing the overall bullish outlook for IRCTC.

With Thanks Reference to: https://www.businesstoday.in/markets/company-stock/story/irctc-shares-two-year-gains-fall-price-targets-resistance-outlook-418879-2024-02-26 and https://www.zeebiz.com/markets/stocks/news-irctc-share-price-nse-nse-swiggy-tie-up-ecatering-service-277727