The state-owned Indian Railway Catering and Tourism Corporation (IRCTC) shares cross the Rs 3,000 barrier on the BSE for the first time making it part of India’s top 100 most valuable listed firms. The company is now in the process of a stock split.
The shares of IRCTC rose for the third day in a row on Tuesday, with the Indian Railways’ PSU reaching a new lifetime high of Rs. 3,040 per share on Monday.
According to market analysts, IRCTC shares may continue to rise to new highs after breaking out above 3000. They have predicted that its shares may rise to Rs. 5,000 per share over the next 18 to 24 months.
The company’s market value stood Rs 48,152 crore, making it one of the top 100 BSE companies by market capitalization.
Speaking on the reason for such a rise in IRCTC shares; Ravi Singhal, Vice Chairman at GCL Securities said, “IRCTC share price rally is mainly because of the company’s aggressive focus on its hospitality business. The market has a sense that IRCTC is trying to emerge as A to Z solution provider in the hospitality business as it has been joining hands with aviation and surface transport service providers and at the same time it is tying up with hotels. It is also aggressively focusing on its food supply business by inking deals with local food-chain players. So, IRCTC is no more going to remain just an e-ticket platform.”
The stock has recovered 97 per cent from hitting a low of Rs 1,541 on April 19, 2021.
Today, IRCTC shares cross Rs 3000 and achieved an all-time high of Rs 3041.2, up 5.99 per cent from its previous close of Rs 2,869.40.
The large-cap stock afterwards closed 9.56% higher, or Rs 287.50, at Rs 3,295 on Tuesday.
The stock has gained 19.73% in the last five sessions. The 5 days, 20 days, 50 days, 100 days, and 200-day moving averages are all greater than the IRCTC share price.
The stocks have surged 138.65% in the last one year and have surged 127% this year alone.
The IRCTC board of directors approved a 1:5 stock split on August 12 of this year in order to increase capital market liquidity, broaden the shareholder base, and make shares more affordable to small investors. The shares of IRCTC have risen 22% since the announcement.
The liquidity of a stock increases as a result of a stock split. Because the corporation divides existing shares into new shares, the stock becomes more accessible for regular investors. The firm’s market capitalization, on the other hand, remains unchanged.
The Indian Railways has authorized IRCTC to provide culinary services to railways, online railway tickets, and packaged drinking water at railway stations and trains throughout India.
In online rail bookings, it has a 73 per cent market share, while in bottled drinking water, it has a 45 per cent market share.
Speaking on the immediate IRCTC share price target; Sumeet Bagadia, Executive Director at Choice Broking said, “The stock has given fresh breakout today at ₹3,000 levels. One can buy this Indian Railways’ PSU counter for immediate to the short-term targets of ₹3200 to ₹3400. However, one must maintain the stop loss at ₹2800 while taking this position in IRCTC shares.”
