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MUMBAI : Indian Railway Catering & Tourism Corp (IRCTC) fell sharply in the last hour of trading on Tuesday, paring all its gains after the stock hit 1 trillion market cap, the ninth public sector firm to achieve the milestone.

The stock made wild swings after scoring a record high of 6,384.14 apiece in intraday trade, lifting its market cap to 1.01 trillion. The stock, however, tumbled 21.7% from the day’s peak to a low of 4,995.80 in the last hour of trading. It closed 8.75% lower at 5,363 a share on the Bombay Stock Exchange.

Analysts have attributed the huge volatility to speculations that it has entered into futures and options (F&O) ban. Analysts say that the market-wide position limit on the October futures of IRCTC likely crossed 95% of limit. Stocks enter the ban once open interest crosses 95% of the limit and come out of it once its below 80%.

Earlier, state-run firms such as State Bank of India, Coal India Ltd, NMDC Ltd, Indian Oil Corp. Ltd, Power Grid Corp. Ltd, SBI Life Insurance, Bharat Petroleum Corp. Ltd and SBI Cards have achieved this milestone. IRCTC listed on the stock exchanges on 14 October 2019 after selling shares at 320 apiece in an initial public offering. Since then, the stock has surged more than 18-fold or 1737%. So far this year, it has gained 308.1% while so far this month, it advanced 58%.

Analysts said coronavirus cases are under control amid progress on vaccinations while the economy unlocks fully in many parts of the country, benefiting IRCTC.

“IRCTC as a company is a pure monopoly business and the recent surge in stock prices is giving great reward to shareholders on the back of unlocking the economy and upcoming festival season which will boost the company’s revenue," said Akhil Rathi, vice president advisory at Marwadi Financial Services.

Despite challenges from the second wave, IRCTC delivered strong numbers in the June quarter as catering segment revenues improved, rail neer packaged drinking water segment turned EBIT positive after four quarters and internet ticketing business continued to deliver strong margins.

“The internet ticketing saw a jump in Q1 due to low base in last year; we expect in Q2 this segment will grow substantially higher at around 50% as compared to Q1. Also, the number of trains will increase which will increase the revenue for Rail Neer and Catering services," Rathi added.

In the June quarter, the number of tickets booked per day stood at 63.7 million

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