Date- 14/11/2019
CMP- 906
IRCTC(Indian Railway Catering and Tourism Corp Ltd) was listed a month back and has already given fantastic returns, but will the run continue , lets find out. The company is mainly into 4 verticals a) Tourism b) Catering c) Neer Bottled water d) Ticketing. Its a monopolistic business and future prospects are pretty bright. As of March 2018, it had sold 28,475 crore train tickets in one year at a 14% growth rate, from September this year they have decided to charge Rs 15-30 as convenience fees which adds to Rs 4 lakh crore of revenue (30 times its current market cap). In catering also they have exclusive license to serve food and beverages to passengers which is also a moat for the company. In the packaged water business they are adding 11 new plants to meet the demand for packaged water served on trains and stations.
Company Fundamentals:
EPS :19.12
P/E : 40.91
Book Value :105
P/B : 8.81
Indian railways fares have increased 60% from the year 2102 to 2017 while air fares during the same period have been more or less flat. But despite loosing passengers their revenues have grown at CAGR of 8-10% during the last 5-6 years, also the average km traveled has gone up from 127 km in 2012 to 142 km in 2017. The railway network is consistently been added and by 2020-2021 almost 795 km network will be added in northeast which is a major tourist attraction. Also they own luxurious trains such as Maharaja express whose one week trip could force you to shell out Rs.550,000. Recently on their website they have also launched international tours to Japan and Singapore, now if you think from the mindset of the common man he is more likely to book a tour through IRCTC rather than a private tour operator as it gives him a sense of safety.
Though many would advise selling shares after the rally i think otherwise. IRCTC is a prime example of absolute monopoly along with healthy dividend yield of 2% and the only other company which enjoys similar monopoly is adhesive player Pidilite Industries. Pidilite has price to book of 15 times almost double to what IRCTC is trading right now. So if anybody has a holding period of 2-3 years the stock can easily see levels of Rs.1300-1500 and any dips towards the levels of rs 700-800 should be aggressively bought into.
Happy Investing
CMP- 906
IRCTC(Indian Railway Catering and Tourism Corp Ltd) was listed a month back and has already given fantastic returns, but will the run continue , lets find out. The company is mainly into 4 verticals a) Tourism b) Catering c) Neer Bottled water d) Ticketing. Its a monopolistic business and future prospects are pretty bright. As of March 2018, it had sold 28,475 crore train tickets in one year at a 14% growth rate, from September this year they have decided to charge Rs 15-30 as convenience fees which adds to Rs 4 lakh crore of revenue (30 times its current market cap). In catering also they have exclusive license to serve food and beverages to passengers which is also a moat for the company. In the packaged water business they are adding 11 new plants to meet the demand for packaged water served on trains and stations.
Company Fundamentals:
EPS :19.12
P/E : 40.91
Book Value :105
P/B : 8.81
Indian railways fares have increased 60% from the year 2102 to 2017 while air fares during the same period have been more or less flat. But despite loosing passengers their revenues have grown at CAGR of 8-10% during the last 5-6 years, also the average km traveled has gone up from 127 km in 2012 to 142 km in 2017. The railway network is consistently been added and by 2020-2021 almost 795 km network will be added in northeast which is a major tourist attraction. Also they own luxurious trains such as Maharaja express whose one week trip could force you to shell out Rs.550,000. Recently on their website they have also launched international tours to Japan and Singapore, now if you think from the mindset of the common man he is more likely to book a tour through IRCTC rather than a private tour operator as it gives him a sense of safety.
Though many would advise selling shares after the rally i think otherwise. IRCTC is a prime example of absolute monopoly along with healthy dividend yield of 2% and the only other company which enjoys similar monopoly is adhesive player Pidilite Industries. Pidilite has price to book of 15 times almost double to what IRCTC is trading right now. So if anybody has a holding period of 2-3 years the stock can easily see levels of Rs.1300-1500 and any dips towards the levels of rs 700-800 should be aggressively bought into.
Happy Investing
ReplyDeleteThanks for sharing valuable information.
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