IRCTC share price jumps 9% to record high; Mcap soars above Rs 52,000 crore; analysts warrant caution

Indian Railway Catering and Tourism Corporation (IRCTC) share price rallied over nine percent to touch a fresh record high of Rs 3,297.90 on Tuesday. The company's market capitalisation also crossed Rs 52,000 crore on the BSE.

The stock price has jumped more than 54 percent in the last three months and it is up over 125 percent YTD. In the last year, it registered a gain of more than 128 percent, outperforming the benchmark indices and the broader markets.

Analysts say the stock rally can be attributed to the reopening of the economy which will benefit the travel sector and the company’s monopoly in the internet ticketing for Indian Railways.

“Investors are betting upon the long-term growth prospects of the company. IRCTC is moving towards becoming a complete travel solutions provider from just a railway ticketing services company. Strong revenue growth visibility over the next couple of years, platform business model, reopening of the economy and stock split news are certain tailwinds playing out for the stock,” said Avinash Gorakshakar, Director Research, Profitmart.

However, experts also believe that after a sharp over 100 percent rally in one year, the stock is trading at an expensive valuation and any negative news over the Covid-related restrictions on travel in the country can be negative for the stock.

“Investors need to be careful at these levels. The rally in IRCTC shares has been unusual. We remain concerned about these valuations. If there is a correction in the headline market, stocks like IRCTC will also see a big fall,” Gorakshakar added.

He recommends entering the stock at a meaningful dip in the price.

At 1 pm, the shares of IRCTC were trading 8.69 percent higher at Rs 3,271 apiece on the BSE with a market cap of above Rs 52,300 crore.