This midcap railway stock tripled investor money in 1 year

Indian benchmark indices have delivered decent returns in the last one year, with the BSE Sensex and the NSE Nifty rising in the range of 23-25% during this period. Outperforming the benchmark indices, there are some midcap stocks that have showered a lot of money on investors. Indian Railway Catering and Tourism Corporation (IRCTC), the ticketing arm of Indian Railways, is one such midcap stock that tripled investor money in just one year, thanks to stellar financial performance and reopening of the economy post the second wave of the Covid-19 pandemic. The strong growth in sales from internet ticketing and catering businesses also added optimism regarding future growth prospects.

IRCTC saw its shares surging from ₹291 on January 28, 2021, to ₹841 per share in intraday trade today, delivering a return of 189% to its shareholders over the past 12 months. If a person had invested ₹1 lakh in this retail stock on the same date last year, it would be worth Rs ₹2.89 lakh at present.

IRCTC stock surges 434% since listing in 2019

The state-owned company, which provides ticketing, catering, and tourism services for the Indian Railways, has given a stellar return to investors since its listing in 2019 by rising 434% during this period.

In the last six months, the stock has risen 83%. However, it seemed to have lost momentum in last three months and underperformed the broader market. The stock has fallen 8% over the past three months, as compared to a 3.5% drop in BSE Sensex. It has shed 3% in one month.

On Friday, IRCTC's share price opened higher at ₹826 against the previous close price of ₹814.15 and gained as much as 3.3% to hit a high of ₹841.55 in the first two hours of the day’s trade. Its market capitalisation stood at ₹67,236 crore.

The travel sector stock traded 34% lower than its 52-week high of ₹1,278.60 touched on October 19, 2021, and 190% higher than its 52-week low of ₹286.86 hit on January 28, 2021.

Technically, the stock was in a “mildly bullish” range, trading higher than 200-day moving averages, but lower than 5-day, 20-day, 50-day, and 100-day averages.

Net profit surges 386% YoY in September quarter

IRCTC had reported stellar earnings during the second quarter ended September 30, 2021, driven by strong revenue from sales of internet ticketing as well as catering business. For the July-September period of 2021, the net profit surged to ₹158.6 crore, nearly five times higher as compared to profit of ₹32.6 crore in the year-ago period. The total income also rose to ₹405 crore in Q2 FY22, as against ₹88.6 crore in the same period last year.

Both the topline and bottomline growth were driven a low base in the year-ago quarter and improvement in the overall demand. Indian Railways had suffered a massive loss last fiscal, as several revenue-making operations remain suspended for months in wake of the Covid-19 pandemic and the subsequent lockdowns. However, the situation has slightly improved in the last nine months of the current financial year, thanks to rise in income from passenger traffic and freight earnings.

For the financial year ended March 31, 2021, the revenue from operations dropped sharply to ₹783.05 crore as compared to ₹2,264.31 crore in the previous fiscal as businesses were completely shut for several months due to complete lockdown imposed in most of the countries. The profit after tax also decreased by 63% to ₹189.90 crore, from ₹513.11 crore in FY20.

IRCTC’s board is set to meet on February 8, 2022, to consider and approve the financial results of the company for the quarter and nine months ended on December 31, 2021. The board will also consider the declaration of interim dividend for FY22, if any, it said in an exchange filing.