IRCTC share price rally is expected to continue as market has gone highly bullish over the aggressive expansion of IRCTC in hospitality sector and Indian Railways' asset monetisation, experts believe
Indian Railway Catering and Tourism Corporation or IRCTC share price today climbed new peak of ₹3,587 per equity share. The Indian Railways' PSU stock opened today with an upside gap of ₹51.25 and went on to hit new lifetime high — logging around 4.5 per cent rise in the early morning deals. According to experts, this IRCTC stock price rally is expected to continue as market has gone highly bullish over the aggressive expansion of IRCTC in hospitality sector and Indian Railways' asset monetisation move. They said that IRCTC is tried and tested player in running private trains and now after the news of world class lounge at New Delhi railway stations, street observers have come to know that IRCTC will be a beneficiary in platform monetisation as well.
Speaking on the reasons that are driving IRCTC share price; Ravi Singhal, Vice Chairman at GCL Securities said, "IRCTC is aggressively focusing on its hospitality business by tying up with hotels, tour and travel service providers and local food suppliers. It is also giving special focus to its food chain business in running trains. Apart from this, IRCTC has made tie-ups with aviation companies as well. So, market has reaslised that in coming times, it is no more going to remain an Indian Railways' e-ticket booking platform. It will emerge as A-Z hospitality service provider."
Echoing with Ravi Singhal; Santosh Meena, Head of Research at Swastika Investmart Ltd said, "IRCTC is in strong bullish momentum where it has gained more than 100 per cent in 2021 and crossed the psychological level of ₹3000. The correction due to Covid-19 was a great opportunity for portfolio investors to latch onto it as everyone wanted to buy it before Covid-19 at any price because of its monopoly and future growth outlook. The reopening theme is getting momentum whereas it has a tailwind of stock split news. Railways' asset monetization plan is another trigger for its re-rating."
On IRCTC getting benefit of Indian Railways' asset monetisation move, Ravi Singhal of GCL Securities said, "There are more private trains expected to run on the railway tracks. Since, IRCTC is a tried and tested player in this business; it is expected to get major benefit of this. Apart from this, the Indian Railways is going to monetize its platforms as well. After the news of IRCTC's world class lounge at New Delhi railway station, Dalal Street has realised that there is business opportunity for IRCTC in Indian Railways' platform monetisation too."
Asked about the outlook for IRCTC share price; both experts said that IRCTC shares are positive and it may go up to ₹4000 in mid-term while in the long-term, it may go up to ₹5000 to ₹5100 per equity share levels.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.