IRCTC enters top-100 m-cap league; stock zooms 99% in one month

Led by strong rally in the past month, Indian Railway Catering and Tourism Corporation (IRCTC) has entered the list of top 100 companies with the highest market capitalisation (m-cap) 

Shares of the online ticketing, tourism and the catering arm of railways hit a new high of Rs 1,995, up 4 per cent on the BSE on Tuesday. In the past month, the stock has zoomed 99 per cent from level of Rs 1,003, as against a 3 per cent decline in the S&P BSE Sensex.

With an m-cap of Rs 31,744 crore at 12:05 pm, IRCTC stood at 96th position in the overall market capitalisation ranking, the BSE data shows. On its listing day, October 14, 2019, the company's m-cap stood at Rs 11,658 crore, and was ranked 194th.

Currently, IRCTC's m-cap is more than two of the Nifty 50 companies -- Zee Entertainment Enterprises (Rs 24,329 crore) and YES Bank (Rs 8,990 crore). The company has also surpassed 27 companies from the S&P BSE 100 index including MRF, Lupin, Aurobindo Pharma, Page Industries, Apollo Hospitals Enterprises, ACC, Ashok Leyland, Bharat Forge and TVS Motor Company during the period.

With today’s rally, IRCTC has zoomed 523 per cent as against its issue price of Rs 320 per share on the BSE. The company had declared an interim dividend at the rate of Rs 10/- per share, which is 100 per cent of paid up share capital. The stock already turned ex-date for dividend on Monday, February 24, 2020.

IRCTC is the only entity authorized by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India. It has a dominant position in the online rail bookings/packaged drinking water with around 73 per cent/45 per cent market share, respectively.

For October-December quarter (Q3FY20), the company posted a strong profit growth on back of healthy performance from e-ticketing services. The profit before tax (PBT) from e-ticketing services jumped an over five times to Rs 193 crore in Q3FY20 as compared to Rs 36 crore in the same quarter of the previous year.

Railway has approved the new tariff for the catering for the premium & non-premium trains and for the static unit. The revised rate will be applicable from March 28, 2020 on the pre-paid trains. Indian Railways plans to add pantry car in long running trains and hence it will increase the catering revenue for the company.

IRCTC has reintroduced service charges on the internet ticket booking from September 2019 and will not require sharing revenue with railway. E-ticket share is 73 per cent and it is increasing at 2-3 per cent in year.

Meanwhile, railway is planning to add 150 trains on private basis and company will participate in the project. The company has appointed consultant to guide company to how to take this project. IRCTC has added two railneer plants during the October-December quarter (Q3FY20) and will add two more plants in current quarter (January-March 2021), analysts at Narnolia Financial Advisors said in a note.