The shares of Indian Railway Catering & Tourism Corporation Ltd (IRCTC) were trading at Rs 950.70 on the BSE, marking a 1.03 per cent increase or Rs 9.65 higher compared to the previous close of Rs 941.05. Sanjiv Bhasin, a famous investor and Director at IIFL Securities Ltd, holds an optimistic view on IRCTC. He regards IRCTC as the top-performing business among Public Sector Undertakings (PSUs).
On February 16, the state-owned rail ticketing and catering services provider announced through a regulatory filing that the Rail Neer Plant, operating on a Public-Private Partnership (PPP) model, located in Vishakhapatnam, Andhra Pradesh, has commenced commercial production. Rail Neer, which is the flagship product of IRCTC, will be manufactured at this facility, with a production capacity of 72,000 litres per day.
In the filing, the PSU stated, “The distribution of Rail Neer manufactured at Rail Neer Plant, Vishakhapatnam is likely to start in a phased manner to Railway Station at Anakapalle, Duvvada, Visakhapatnam, Tuni, Vizianagaram, Annavaram, Samalkot, Srikakulam, Kakinada, etc.”
With the launch of the plant in Vishakhapatnam, the overall production capacity of Rail Neer has risen to 17.68 lakh litres per day, as stated by the company.
Sanjiv Bhasin has assigned a ‘BUY’ rating to the railway stock, setting an initial target price of Rs 1,000 for the stock with a stop loss of Rs 918. Additionally, he mentioned that if an investor holds the stock for a year, he has set a target price of Rs 1250.
“I mentioned earlier, now Vande Bharat is also under IRCTC. The figures are quite impressive, with 85 per cent of their EBITDA derived from train bookings, including Vande Bharat. Consider the volume implications: 36 per cent is attributed to Rail Neer and with the recent capacity increase, this segment is poised for growth. Additionally, 16 per cent of revenue comes from catering.
The initial target is Rs 1000 and if you hold the stock for the year, the target is Rs 1250,” he elaborated.
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