Buy Indian Rail Tour Corp: IIFL Securities's Target Price Rs 1095

On April 12, IIFL Securities issued a buy recommendation for Indian Rail Tour Corp (IRCTC), assigning a target price of Rs 1095. This represents a potential upside of 2.7% from the current market price of Rs 1066.25. The bullish call is based on the company's strong financials, including robust growth in revenue, profit, and return on equity. IRCTC's dominant position in the online travel booking segment is also viewed as a key factor supporting the buy recommendation.

About Indian Rail Tour Corp:

Indian Rail Tour Corp (IRCTC) is a public sector undertaking (PSU) under the Ministry of Railways of the Indian government. It was established in 2001 as a subsidiary of Indian Railways (IR). IRCTC is primarily engaged in providing online railway ticketing services, catering services on trains, and tourism packages related to Indian Railways. It also offers hotel and flight bookings, travel insurance, and other travel-related services. IRCTC is the only authorized entity to handle online railway ticket booking in India and has a vast network of agents across the country.

52 Week Price Trend:

Indian Rail Tour Corp's (IRCTC) current market price (CMP) of Rs 1066.25 indicates a significant premium over its 52-week high of Rs 1049.75. This premium is largely attributed to the company's strong financial performance and growth prospects. IRCTC's recent quarterly results have been impressive, with revenue and profits showing steady increases. The company's monopoly over online rail ticket booking in India gives it a significant competitive advantage. Despite its current high valuation, IRCTC's long-term growth potential and strong industry fundamentals suggest that it may still have room for further upside. However, investors should be aware of the risks associated with investing in a high-growth stock, including potential volatility and market corrections.

Stratzy's MOST Analysis:

IRCTC has been assigned a AAA rating by Stratzy's MOST framework, indicating the company exhibits low fundamental risks. This rating is derived from favorable assessments of IRCTC's management, outlook, safety, and trend. The strong management team, positive growth outlook, solid financial position, and consistent growth trajectory contribute to IRCTC's high MOST score. This AAA rating suggests that IRCTC is a financially sound and well-managed company with a promising growth potential.

Company's Fundamentals:

Indian Rail Tour Corp (IRCTC), listed on NSE, is currently trading at a stock PE of 68.17, indicating that the stock is relatively overvalued compared to its earnings. Additionally, the PB ratio of 27.22 suggests that the stock is trading at a premium, as it is priced at over 27 times its book value. However, IRCTC offers a low dividend yield of 0.57%, which may not be attractive to income-oriented investors. To make an informed investment decision, it's crucial to consider these financial metrics in conjunction with the company's overall financial health and industry outlook.

Fundamental and Technical information provided in this blog were last updated on 12 Apr, 2024

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