Up 60% in 6 months, this railway PSU stock may be gearing up for higher levels

On Tuesday, May 21, Indian benchmark indices closed flat in the volatile session. Sensex was down 52.63 points or 0.07 per cent at 73,953.31, and the Nifty was up 27 points or 0.12 per cent at 22,529 today.

Meanwhile, let's take a look at this railway PSU stock for a long-term buying perspective suggested by analysts.

PSU stock to buy

Zee Business analyst Kushal Gupta suggests investors buy Indian Railway Catering and Tourism Corporation (IRCTC), one of the prominent railway stocks in India, for one year. On Tuesday, May 21, the stock closed at Rs 1,115.5 each, up 1.28 per cent or 14.10 per share on BSE.

IRCTC - Share price target

Gupta has given a target price of Rs 1,300 per share. The target implies an upside of around 17 per cent from Tuesday's (May 21) closing price.

The railway company is yet to announce its financial results for the fourth quarter (Q4FY24) of the financial year 2024. The earnings of March quarter are due on May 28, 2024.

Aamar Deo Singh's (head advisory, Angel One) view on IRCTC 

Overall, IRCTC is a stock to invest in the long-term portfolio, more in a SIP mode, given its strategic and key role in the growth of the Indian railways. It is a stock one can look at, also from a diversification perspective, given that, both the sales and profitability growth have been in double digits over the past few years. Further, given India's growth story in the long run, this is a stock to keep a close watch on. The stock has YTD generated returns of almost 27 per cent for investors, but is still far away from its all-time high of 1279, witnessed in October 2021.

A look at IRCTC's Q3FY24 results

IRCTC reported a consolidated net profit of Rs 300 crore for the quarter ended December 31, 2023, up 17.4 per cent on a year-on-year basis. Its revenue grew 22 per cent to Rs 1,118.3 crore, according to a regulatory filing.

The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 21 per cent to Rs 394 crore for the fiscal third quarter, while margin, a key measure of profitability, stood at 35.2 per cent. 

Revenue from the PSU's catering and internet ticketing units increased 29 per cent and 11.4 per cent to Rs 508 crore and Rs 335.3 crore respectively, according to the filing. While revenue from packaged drinking water Rail Neer increased 6.3 per cent to Rs 84 crore, that from its tourism and State Teertha businesses grew 36.2 per cent and 10 per cent to Rs 167.5 crore and Rs 28 crore, respectively. 

The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers consulting their investment advisers before making any financial decision.