Indian Railway Catering and Tourism Corporation (IRCTC) shares were blocked in the lower circuit strip for the eighth consecutive day Wednesday, down 5% to Rs 816 on BSE due to concerns over poor earnings due to train cancellations to curb the spread of coronavirus (Covid-19). In comparison, the S&P BSE Sensex was up 5% or 1,360 points at 28,034 at 1:10 p.m.
The stock of the state-owned travel support services company reached its lowest level in five months and was trading at its lowest level since October 22, 2019. In the past month, it reached 58%, compared to a drop of 30%. in the benchmark. The IRCTC made its stock market debut on October 14, 2019.
To curb the coronavirus epidemic, Minister of Railways Piyush Goyal announced on March 22, 2020 that all passenger train services on the Indian Railways, including premium trains, postal / express trains, the Konkan Railway, etc., will be canceled until March 31.
The Covid-19 epidemic prompted travelers to reconsider their vacations in the midst of a global pandemic, putting pressure on the travel and tourism industry.
The IRCTC is the only entity authorized by the Indian railways to provide catering services to railways, online railway tickets and conditioned drinking water at stations and trains in India. It occupies a dominant position in online rail reservations / conditioned drinking water with around 73% / 45% market share, respectively.
The IRCTC action had a dream race during the first two months of the current calendar year 2020. It zoomed 109% to reach a record of Rs 1 995 on February 25, 2020 on solid results from quarter from October to December 2019 (Q3FY20). In comparison, the S&P BSE Sensex fell by 2% over the same period.
For the third quarter of 2010, the IRCTC posted strong profit growth thanks to the good performance of electronic ticketing services. Pre-tax profit (PBT) of electronic ticketing services jumped more than five times to Rs 193 crore in T3FY20 compared to Rs 36 crore in the same quarter of the previous year. The segment’s turnover jumped four times to Rs 227 crore against Rs 55 crore in the corresponding quarter of the previous year.
Overall, the IRCTC posted a net profit of Rs 206 crore in the December quarter, compared to Rs 74 crore in the quarter of the previous year. The total turnover of the company increased to Rs 716 crore against Rs 435 crore in the quarter of the previous year.
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