IRCTC shares continue to fall, plunge 15%. Should you buy?

IRCTC has a dominant position in online rail bookings and packaged drinking water, Avaneesh Parasar

Indian Railway Catering and Tourism Corporation (IRCTC) shares continued to decline as the stock slipped over 15% to ₹4,610 apiece in Wednesday’s early trading session deals. On Tuesday, the stock witnessed a sudden decline of over 15% towards closing. Though, it managed to settle off-lows and closed at ₹5,363 apiece, down 8% on the BSE. The scrip had hit a record high of ₹6,393 per share in Tuesday’s early session.

IRCTC is part of the stock exchange NSE’s futures and options (F&O) ban list on Wednesday. As per the National Stock Exchange (NSE), the stock is banned under the F&O segment as it has crossed 95% of the market-wide position limit (MWPL).

“IRCTC shares have skyrocketed in the recent one month and hence profit-booking was strongly awaited. But, it won’t fall much from now onwards as majority stake in the company is owned by the Government of India (GoI). But, it doesn’t mean should buy at this dip. In my opinion, the market is expected to remain weak for next few trade sessions and hence IRCTC shares may go with the market flow. The stock is expected to remain range-bound now till its Q2FY22 results are announced,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.

IRCTC is in a pure monopoly business as it is the only authorized firm to provide online tickets and catering services to the Indian railways. This along with its robust financials as well as a debt-free status had made it a favorite among all kinds of investors. IRCTC had entered the primary markets by listing in October 2019 and its stock has delivered stellar return to its shareholders since then.

Sumeet Bagadia, Executive Director at Choice Broking said, “IRCTC shares look weak on the chart and one should avoid fresh buy in the counter. The Indian Railways’ PSU stock is having strong hurdle at ₹6000 to ₹6100 levels and it has strong support at ₹5000 to ₹5100 per share levels.”

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 online rail bookings and packaged drinking water.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
Source: https://www.livemint.com/market/stock-market-news/irctc-share-price-hits-10-lower-circuit-should-you-buy-11634699660992.html