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.

MSTC, Mishra Dhatu Nigam, IRCTC hit new highs, surge over 20% in a week

Shares of three state-owned companies, Indian Railway Catering and Tourism Corporation (IRCTC), MSTC, and Mishra Dhatu Nigam (MIDHANI), hit their respective fresh highs on the bourses on Thursday. These stocks have rallied in the range of 20 per cent to 27 per cent during this week, as compared to 0.39 per cent decline in the benchmark S&P BSE Sensex during the period.

MSTC soared 19 per cent to Rs 205 on the BSE on Thursday. The stock has rallied 47 per cent in the past six trading days on the BSE on the back of heavy volumes. The stock of the state-owned e-commerce firm was trading at its highest level since listing on March 29, 2019. It surpassed its previous high of Rs 184, touched on November 13, 2019.

For the October-December quarter (Q3FY20), MSTC reported 23 per cent quarter-on-quarter (QoQ) growth in consolidated profit before tax (PBT) at Rs 55.85 crore. Its e-commerce revenue grew 42 per cent QoQ at Rs 59.10 crore.

MSTC is developing a portal for department of investment and public asset management (DIPAM) for strategic disinvestment of public sector undertakings (PSU’s). The portal for sale of all organic produce in the country with mapping of data has been commissioned for Ministry of Agriculture. Logistic partners are being empanelled, after which commercial transaction B2B and B2C will happen.

Shares of IRCTC, the online ticketing, tourism and the catering arm of railways, surged 6 per cent and hit a new high of Rs 1,940 in intra-day trade today. In the past three trading days, the stock has rallied 28 per cent ahead of the commercial run of Kashi Mahakal Express, the third train operated by it, from today (February 20). The stock was trading at its highest level since listing on October 14, 2019.

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.

Shares of Mishra Dhatu Nigam Limited (MIDHANI), too, surged 14 per cent to Rs 249 on Thursday. The stock has zoomed 51 per cent in the past six trading days after reporting a more than three-fold jump in its December quarter net profit at Rs 60.50 crore. It had posted a profit of Rs 16.90 crore in the year-ago quarter.

The stabilisation of 1500T Forge press and other recent capital investments coupled with a healthy order booking, particularly from space sector, has enabled the mini-ratna defence public sector undertaking MIDHANI to achieve healthy turnover during the quarter.

COMPANY LATEST 1-WK BEFORE GAIN(%)

MISHRA DHATU NIG 229.20 181.65 26.2

I R C T C 1920.90 1579.95 21.6

MSTC 197.10 163.85 20.3

IRCTC scales fresh record high; zooms 445% against issue price

Shares of Indian Railway Catering and Tourism Corporation (IRCTC), the online ticketing, tourism and the catering arm of railways, hit a new high of Rs 1,743, up 6 per cent on the BSE on Wednesday.

In the past two trading days, it has rallied 15 per cent ahead of the commercial run of Kashi Mahakal Express, the third train operated by it, from Thursday, February 20. The stock was trading at its highest level since listing on October 14, 2019.

With today’s rally, IRCTC has zoomed 445 per cent as against its issue price of Rs 320 per share on the BSE. The retail investors had received shares at a discount of Rs 10 per share at Rs 310 per share.

Supported by the sharp rally in the stock price, IRCTC now stands at 106th position in the overall market capitalisation ranking with Rs 27,823 crore as m-cap. On the day of its market debut, the company was at 194th position, the data shows.

IRCTC is all set to introduce the third private train in the railways network and its first night service Kashi Mahakal Express on the Varanasi-Indore route from Thursday. The other two private trains run by the IRCTC are the Lucknow-New Delhi Tejas, and the Ahmedabad-Mumbai Tejas.

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.

Overall, IRCTC posted a net profit of Rs 270 crore in the December quarter, as against Rs 112 crore in the year-earlier quarter. The total revenue of the subsidiary of Indian Railways rose to Rs 716 crore from Rs 435 crore in a year ago quarter. The revenue from IRCTC e-ticket services jumped four times to Rs 227 crore in Q3FY20 as against Rs 55 crore in the corresponding quarter previous year.

IRCTC jumps 12.5% on strong Q3 nos; Co announces interim dividend of Rs 10

Indian Railway Catering and Tourism Corporation (IRCTC), the recently-listed online ticketing, tourism and the catering arm of railways, jumped over 12 per cent on Thursday, a day after the company posted strong set of numbers for the quarter ended December 31, 2019.

At 09:28 am, the stock was quoting around 10 per cent higher at Rs 1,559 apiece on the BSE. It hit a high of Rs 1,596.95 in the early trade against previous close of Rs 1,418.95. In comparison, the S&P BSE Sensex was trading 0.14 per cent lower at 41,508 levels.

For the quarter under review, IRCTC posted a whopping 178 per cent year-on-year (YoY) jump in its net profit at Rs 206 crore against Rs 74 crore profit in the corresponding quarter of the previous fiscal.

Total revenue during the period stood at Rs 735 crore, up 62 per cent against Rs 454 crore in the year-ago period.

Basic earnings per share (EPS) of the company was at Rs 12.86 against Rs 4.6 in the December quarter of the previous fiscal.

The company also declared interim dividend of Rs 10. Record date for the same has been set as 25 February, 2020.

IRCTC shares were listed on October 14, 2019. The stock made a stellar debut on the bourses by listing at Rs 644, a 101 per cent premium over its issue price of Rs 320 per share on the BSE. Since retail investors received shares at a discount of Rs 10 per share, for them the issue price stood at Rs 310 per share. The stock on that day had settled at Rs 728.6 apiece on the BSE.

Since October 14, the stock has jumped 95 per cent (as of Wednesday's close) against around 9 per cent rise in the S&P BSE Sensex.

From Polycab India to IRCTC, IPOs that doubled your money in 2019

Calendar year 2019 (CY19) has turned out to be a good year for those who invested in equities via the primary market route with most of the new listings outperforming the S&P Sensex. As many as 92 per cent of the stocks of companies that listed in 2019 are trading well above their issue price and have given a return of over 200 per cent.

Among individual stocks, investors in four new listed companies – Indian Railway Catering and Tourism Corporation (IRCTC), IndiaMART InterMESH, Affle (India) and Polycab India – have doubled their money post their stock debuted at the exchanges. While the S&P BSE IPO index has surged 35 per cent in CY19, the benchmark S&P BSE Sensex has gained around 12 per cent during this period. S&P BSE Smallcap and S&P BSE Midcap indices, on the other hand, have slipped 10 per cent and 5 per cent, respectively.

“There will always be an appetite for good quality issues that are reasonably priced. That’s what has played out in select public offerings in CY19. Going ahead, too, such issues will find takers. The government’s divestment agenda can succeed if issues are priced attractively. As regards investors, they should look for niche businesses with good growth and earnings prospects before investing in the primary market,” says G Chokkalingam, founder and managing director at Equinomics Research.

And the data does prove this theory. For instance, the stock of Indian Railway Catering and Tourism Corporation (IRCTC) – a government-owned company in the railway ticketing and catering business – has soared 202 per cent to Rs 981 as against its issue price of Rs 320 per share. Currently, the scrip is quoting at Rs 867 on the BSE. Shares of Polycab India – a fast moving electric goods company – hit a new high of Rs 1,091 on December 5. The stock has zoomed 103 per cent from its issue price of Rs 538 per share.

Of the 13 companies that got listed in 2019, eight have outrun the IPO index by gaining over 38 per cent against their respective issue price. Four have gained in the range of 8 per cent to 19 per cent from issue price. Sterling and Wilson Solar, the sole company in this category, has failed to give a positive return and is trading 65 per cent lower on the BSE. Except, Sterling and Wilson Solar, the remaining 12 companies that raised Rs 8,362 crore through IPOs in 2019 are currently valued 50 per cent higher at Rs 12,581 crore.

Ambareesh Baliga, an independent market expert also shares the same opinion and says investor are lapping up offers that are attractively priced and offer value to investors from a medium-to-long term horizon.

“Issues that are attractively priced will always find takers. Mid-and small-cap segment as a whole has suffered a lot due to a change in definition in 2018. Some of the good quality stocks were collateral damage. Going ahead, such stocks that saw a sharp decline and the mid, small-cap segment as a whole should do well,” Baliga says.

IRCTC makes grand debut, doubles over issue price; should you book profit?

Shares of Indian Railway Catering and Tourism Corporation (IRCTC), the online ticketing, tourism and the catering arm of railways, made a stellar debut on the bourses by listing at Rs 644, a 101 per cent premium to its issue price of Rs 320 per share on the BSE. Since retail investors received shares at a discount of Rs 10 per share, for them the issue price stands at Rs 310 per share.

Post listing, the stock gained further to up to Rs 674, a 110 per cent premium to the issue price. Around 1.46 million equity shares changed hands on the BSE at 10:02 am.

The state-owned company raised Rs 645 crore through its initial public offer (IPO). The issue got huge response from all categories of investors. The IPO was subscribed a massive 112 times. The retail category was subscribed nearly 15 times while qualified institutional buyers (QIBs) segment got subscribed 109 times and non-institutional investors (NIIs) category 355 times.

IRCTC is the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

Most of the brokerages had ‘subscribed’ rating on the IRCTC. The company is likely to benefit from monopolistic nature of business, significant growth over FY19-21, an asset-light business model with healthy dividend payouts, and strong parentage, analysts at Motilal Oswal Financial Services (MOFSL) had said.

"IRCTC is in steady business model, which is likely to grow at 12-15 per cent in the next few years. The restoration of convenience charges for e-ticket from September 2019 is likely to generate additional annual revenue of Rs 450 crore. The company has healthy balance sheet with over Rs 1,100 crore cash to support capex. It has good dividend pay-out track record, as it paid around 50 per cent average payout in the last 3 years, Reliance Securities had written in an IPO note.

Should you book profit?

Analysts appear divided on the investment strategy as regards the stock. Some feel IRCTC is a good long-term investment bet given its unique business model and monopoly in the business it operates and hence, advice investors to stay invested. Others, however, feel one should get over the listing euphoria as the bumper listing was expected owing to phenomenal oversubscription of the offer and thus, retail investors, who got allotment in the IPO, should utilise this opportunity to exit.

"One should not be in a hurry to exit. The stock price may not shoot up from here significantly but it is a good long-term investment bet," said Ambareesh Baliga, independent market analyst.

On the other hand, Sudip Bandyopadhyay, group chairman at Inditrade Group of Companies, says listing euphoria was expected given the bumper over subscription the IPO received. "My suggestion to the value investors would be to just stay on the sidelines and watch the stock price movement... where it settles in a day or two and then take a call. As far as small investors are concerned, may be it's a chance to exit," Bandyopadhyay added.

What does this mean for other railway stocks?

IRCTC is a standalone story and it won't have any impact on other railway stocks because the company operates in a completely different space. Hence, it cannot be compared to Titagarh Wagons and Texmaco Rail, Baliga said.

Pay more for IRCTC tickets from Sep 1: Check service charges on AC, non-AC

E-tickets bought through IRCTC will get costlier as the Indian Railways has decided to restore service charges from September 1, according to an order.

The IRCTC will levy a service charge of Rs 15 per ticket for non-AC classes and Rs 30 for AC classes, including first class, according to the August 30 order issued by IRCTC.

Goods and Services Tax (GST) will be applicable separately.

The service charges were withdrawn three years ago to promote digital payments, a pet project of the Narendra Modi-led BJP government.

IRCTC used to levy a service charge of Rs 20 on every non-AC e-ticket and Rs 40 for every AC ticket before it was withdrawn.

Earlier this month, the Railway Board had given its approval to the Indian Railway Catering and Tourism Corporation (IRCTC) to restore the mechanism of charging service charge from passengers booking online tickets.

In a letter dated August 30, the Board had said the IRCTC, railways ticketing and tourism arm, had made a "detailed case" for the restoration of service charge on booking of e-ticket and the matter has been examined by the "competent authority".

It further said the Finance Ministry has contended that the scheme of waiving of service charges was a temporary one and that the railway ministry could begin charging e-tickets.

Officials say that after service charges were discontinued, IRCTC saw a 26 per cent drop in Internet ticketing revenue in financial year 2016-17.

Online train tickets to get costlier as IRCTC restores service charge

E-tickets bought through IRCTC will get more costly as the Indian Railways has decided to restore service fee charges, almost three years after they were withdrawn to promote digital payments, a pet project of the Narendra Modi-led BJP government.

The Railway Board has given its approval to the Indian Railway Catering and Tourism Corporation (IRCTC) to restore the mechanism of charging service charge from passengers booking online tickets.

In a letter dated August 3, the Board has said the IRCTC, railways ticketing and tourism arm, had made a "detailed case" for the restoration of service charge on booking of e-ticket and the matter has been examined by the "competent authority".

It further said the Finance Ministry has contended that the scheme of waiving of service charges was a temporary one and that the railway ministry could begin charging e-tickets.

"In view of the advice given by the Ministry of Finance, the competent authority has decided that IRCTC may take a suitable decision on the imposition/restoration of convenience fee/service charges and the quantum to be levied," the letter said.

Officials say that after service charges were discontinued, IRCTC saw a 26 per cent drop in Internet ticketing revenue in financial year 2016-17.

IRCTC used to levy a service charge of Rs 20 on every non-AC e ticket and Rs 40 for every AC ticket.

IRCTC will now have to decide whether it will keep the earlier charges or increase it.