Why IRCTC shares are sideways despite uptrend in RVNL, IRFC, other rail stocks
Shares of Indian Railway Catering and Tourism Corporation or IRCTC has remained sideways throughout the year 2022. In fact, the stock has remained bears’ favourite sell on rise stock since October 2021. However, in last few sessions, the IRCTC share price is trying to come out of the base building mode. Interestingly, IRCTC shares have failed to gain momentum despite other rail stocks like Rail Vikas Nigam Limited or RVNL, Indian Railway Finance Corp ort IRFC, Ircon International, etc. have given strong return in last one month. RVNL share price has surged to the tune of 85 per cent in last one month, IRFC share price has risen near 45 per cent in last one month whereas Ircon International share price has shot up to the tune of more than 30 per cent in this time horizon.
According to stock market experts, IRCTC is a railway tech stock whereas other rail stocks like Ircon International, RVNL, IRFC, RailTel, etc. are railway infra stocks. They said that market is buzzing with speculation that there can be some big rail infra related announcement coming in from the Finance Minister Nirmala Sitharaman in budget 2023. They said that IRCTC shares have failed to catch momentum because it is basically a rail tech stock that mainly get traction from online rail ticket booking. So, RVNL, IRFC, RailTel, Ircon International, etc. would be a beneficiary company in case the budget expectation is met on 1st February 2023. But, IRCTC won’t be benefitting from the expected announcement, so IRCTC shares have not given bullish move, which other rail stocks have given in last one month.
Speaking on the reason for IRCTC share price not moving in sync with other rail stocks, Manoj Dalmia, Founder & Director at Proficient Equities said, “Rail stocks that have given sharp upside moves in last one month are basically in rail infra business. The market is expecting upcoming budget to remain an infra centric budget and expectations are high that Finance Minister may announce some big ticket rail infra project in upcoming budget 2023. That’s why stocks like RVNL, IRFC, Ircon International, etc. are giving sharp upside move. In fact, pre-budget rally in these rail infra stocks have begun a little earlier and this rally may continue further as well.”
On railway stocks to buy ahead of Union Budget 2023, Ravi Singhal, CEO at GCL Securities said, “One can look at IRFC as IRFC provides credit line to rail infra companies. Hence, IRFC would benefit from the announcement (if it comes) more than any other rail infra companies. So, my bet is behind IRFC as any company getting work in expected rail infra project would need finance and IRFC would be their knocking door after receiving the project order.”
However, some market experts are expecting upside in IRCTC shares as well.
Speaking on IRCTC share price outlook, Mehul Kothari, AVP — Technical Research at Anand Rathi said, “IRCTC shares have given fresh breakout recently after finding support at the 200 day moving average. IRCTC share may go up to ₹780 apiece levels in short term. One can buy IRCTC shares around ₹740 apiece levels maintaining stop loss at ₹720 apiece levels.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.