IRCTC share slipped over 5% in early trade today amid reports that Indian Railways has cancelled all regular trains till August 12, 2020. However, all special Rajdhani, mail and express trains will continue to operate. All the tickets booked for regular timetabled trains for the journey date between July 1 and August 12 stand cancelled, the Railway Board said on Thursday.
IRCTC also disclosed impact of the lockdown on company. The firm said its Q1 earnings of current fiscal are likely to be adversely impacted due to the lockdown. A fall in train journeys has led to a less number of ticket bookings during March, 2020, resulting in drop in e-ticketing earnings through convenience fee, the firm said.
Share price of IRCTC lost 5.65% or Rs 80 to Rs 1,341 against previous close of Rs 1421.35 in early trade on BSE. Total 1.04 lakh shares changed hands amounting to turnover of Rs 14.34 crore on BSE. The stock opened with a loss of 5.29% at Rs 1,346 today. Market cap of the firm fell to Rs 22,092 crore.
IRCTC share price has gained 47.11% since the beginning of this year. The stock trades higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.
Abhijeet Ramachandran, Independent Analyst/ Co-Founder and trainer at Tips2trade said, "With recent developments of increasing Covid 19 cases in India, all train services are going to be massively impacted till August 12. This will have severe impact on IRCTC as even Q2FY21 earnings will be severely impacted. Technically, close below Rs 1,300 could lead to lower targets of Rs 1,200- Rs 1,115 which are good levels for new investors to enter the stock. Only a closing above Rs 1,510 will lead to a big uptrend in IRCTC."
IRCTC share slips over 4% after Railways cancels tickets for journey within Maharashtra
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IRCTC said it has postponed board meeting for considering financial statements for quarter ended March 2020 and FY20 due to unavoidable circumstances. The next date of the meeting shall be intimated in due course.
Commenting on the impact of COVID-19 lockdown on its business, the firm said there has been a decrease in Train journeys due to restriction on public movement, which led to less number of ticket bookings during March, 2020, resulting in drop in e-ticketing earnings through Convenience Fee.
Due to suspension of train operations by Indian Railways in the wake Covid-19 Pandemic, booking of tickets on IRCTC e-ticketing platform (Website & Mobile App) has been adversely impacted. This drop in bookings is expected in the coming quarters also though in a decreased manner.
However, the impact of COVID-19 on the financials of FY20 will be minimal.
The firm said revenues and profitability are likely to be adversely impacted for the April-June quarter of 2020. The company expects the business situation to normalise during 3rd and 4th quarter.
On sales of rail neer, the firm said, "Due to suspension of majority of passenger trains, sales of Rail Neer is expected to be low in upcoming six months. The company has, however, supplied 1,35, 10,444 Railneer bottles to Shramik Special Trains during the movement of migrants from one state to another amid the lockdown."
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