IRCTC: Is the stock back on a bullish track?

A largecap company and a sector leader, IRCTC has the potential for strong growth and provide good business management.

Indian Railway Catering and Tourism Corporation (IRCTC) is engaged in Catering, Hospitality, and transportation. Their main share of revenue comes from internet ticketing, travel and tourism, and packaged drinking water (Rail Neer). A largecap company with a market cap of Rs 72,844 crore and a sector leader, IRCTC has the potential for strong growth and provide good business management. IRCTC has a PE of 171.83 which is lesser than its sector PE of 295.87 indicating that the price is not trading at a higher premium. The major stake is held by the promoters (67.4 per cent) which includes the Government of India.

IRCTC was in the news for the last couple of weeks due to its stock split and sharp sell-off. After the corporate action, the stock took a deep dive as it witnessed a correction of as much as 50 per cent from its all-time high levels and on the way down the stock breached its 20-DMA. Currently, the stock is trading at the level of Rs 909 and it has reclaimed its key short-term moving average i.e. 20-DMA. The 20-DMA moving average is one of the key moving averages used by short-term traders to gauge the short-term trend of the stock. The stock is trading strongly for a few days accompanied by above-average volumes and interestingly took support at 50-DMA. The RSI is positioned at 56, showing strength in the stock. It is showing a U-shape recovery and is expected to trade strong in the upcoming trading sessions.

On Monday when the stock is up almost 5.5 per cent, the change in futures open interest is up by 3.65 per cent indicating that long positions have been added. On the call side, the highest open interest has been seen at the strike price of 1000. The PCR stands at the very low of 0.47 which indicate that reversal is on cards. The stock looks attractive from a short term perspective and traders must keep an eye on this stock.