Shares of Indian Railway Catering and Tourism Corp. Ltd (IRCTC) have rallied 27% after the Union Budget 2020 announcement on February 1 when Finance Minister Nirmala Sitharaman announced that India will get more Tejas-like trains in the near future.
IRCTC shares closed the session on Wednesday at Rs 1,511 apiece, up 7% from its previous close. Notably, the stock has climbed by a whopping 50% in the last nine sessions itself as markets were expecting some positive Budget proposals.
Currently, IRCTC operates private train Tejas Express on two routes. The first Tejas Express which runs on the Lucknow-Delhi route was launched last year, while the second one started last month on the Mumbai-Ahmedabad route.
According to reports, the Indian Railways is set to start third Tejas Express on the Indore-Varanasi route, which will run three days a week. The new train is expected to commence operations this month.
IRCTC shares also got a boost after fair trade regulator Competition Commission of India on Tuesday absolved the company of allegations of unfair market practices. The order came after CCI ordered a detailed probe in November 2018 into the allegations of abuse of dominant market position against the Ministry of Railways and IRCTC for charging higher price than actual base fare on the sale of e-tickets.
It was alleged that the two entities round off the actual base fare to the nearest higher multiple of Rs 5 to arrive at the total base fare, and the practice amounted to an imposition of unfair condition in the market for sale of rail tickets in India, particularly for online booking.
Meanwhile, analysts will also keep an eye on IRCTC’s third quarter results to be announced on 12 February. IRCTC in November had reported a rise of 14% in net profit for the half-year period ended September 2019 at Rs 172.16 crore. This is the first earnings announcement by the IRCTC after its debut on Indian bourses.
IRCTC shares got listed on stock exchanges on 14 October 2019 and have risen nearly 5-fold since then from the IPO price of Rs 320 per share.
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