IRCTC locked in upper circuit as online booking for passenger train starts

Shares of Indian Railway Catering & Tourism Corporation (IRCTC) were locked in 5 percent upper circuit on May 11 as the online booking for passenger train operations started.

The stock corrected 58 percent in past month from its high seen in February due to COVID-19 crisis, but rallied 60 percent from its closing low of March.

Today it was quoting at Rs 1,302.85, up Rs 62.00, or 5 percent on the BSE at 1307 hours IST. There were pending buy orders of 134,304 shares, with no sellers available.

The Indian Railways will be gradually starting passenger train operations from May 12, initially, with 15 pairs of trains (30 return journeys), the government has said on Sunday.

The booking for reservation in these trains will start from May 11 at 4 pm, the government has said, adding that the booking option will be available only on IRCTC website.

Also read: Here is a list of trains Indian Railways will be starting from May 12

The tickets for trains are available only through IRCTC website. Ticketing business contributed 12.4 percent to total revenue of IRCTC and according to Prabhudas Lilladher, is expected to contribute 26 percent to total revenue in FY20.

"Ticket booking counters at the railway stations shall remain closed and no counter tickets (including platform tickets) shall be issued. Only passengers with valid confirmed tickets will be allowed to enter the railway stations," the government has said.

Catering business contributed 55 percent to FY19 revenue of IRCTC, tourism 23.5 percent and Rail Neer around 9 percent.

Prabhudas Lilladher expects company to report a 17.6 percent sequential decline in adjusted profit, 15 percent in revenue and 17 percent in EBITDA for the quarter ended March 2020, largely due to COVID-19-led shutdown.

COVID-led shutdown is expected to lead to a revenue loss of 15-20 days in March quarter, the brokerage said, adding IRCTC's fixed monthly operating expenses burn is in the region of Rs 42-52 crore.

But IRCTC is debt-free and had cash balance of Rs 1,160 crore as of December 2019. Thus, Prabhudas Lilladher believes company can meet its fixed cost obligations from current cash pile without any strain on balance sheet.