Macquarie Sees IRCTC Stock Surging to Rs 900, Initiates 'Buy' Rating
10th Jan 2025
Macquarie's Positive Outlook on IRCTC
Foreign brokerage Macquarie has initiated coverage on Indian Railway Catering and Tourism Corporation Ltd (IRCTC Ltd) with a 'Buy' rating and a target price of Rs 900, citing railway modernisation and faster launch of premium trains as key catalysts for the stock. The brokerage reportedly sees a potential two times return due to India's railway modernisation ambitions.
IRCTC's Diversified Business and Financials
Macquarie said IRCTC enjoys a monopoly position for India railways e-ticketing and catering services, generating 30 per cent free cash flow (FCF) margin and 30 per cent-plus return on equity. The company has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels.
IRCTC's Performance and Valuation
IRCTC shares have fallen 25 per cent in the past six months against a 3 per cent drop in the BSE Sensex during the same period. The stock closed at Rs 763.50 on Thursday. IRCTC reported a 4.48 per cent rise in net profit for the September quarter at Rs 307.86 crore, while revenue from operations grew 7.2 per cent to Rs 1,064 crore. Other income for the quarter rose 27 per cent YoY to Rs 59.97 crore.
Foreign brokerage Macquarie has initiated coverage on Indian Railway Catering and Tourism Corporation Ltd (IRCTC Ltd) with a 'Buy' rating and a target price of Rs 900, citing railway modernisation and faster launch of premium trains as key catalysts for the stock. The brokerage reportedly sees a potential two times return due to India's railway modernisation ambitions.
IRCTC's Diversified Business and Financials
Macquarie said IRCTC enjoys a monopoly position for India railways e-ticketing and catering services, generating 30 per cent free cash flow (FCF) margin and 30 per cent-plus return on equity. The company has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels.
IRCTC's Performance and Valuation
IRCTC shares have fallen 25 per cent in the past six months against a 3 per cent drop in the BSE Sensex during the same period. The stock closed at Rs 763.50 on Thursday. IRCTC reported a 4.48 per cent rise in net profit for the September quarter at Rs 307.86 crore, while revenue from operations grew 7.2 per cent to Rs 1,064 crore. Other income for the quarter rose 27 per cent YoY to Rs 59.97 crore.