market | IST

IRCTC under pressure: IIFL downgrades stock to 'sell'

Mini

As IRCTC continues its recent slide, IIFL has downgraded the stock to a 'sell' at a target price of Rs 4,100.

On Tuesday, the Indian Railway Catering and Tourism Corporation or IRCTC did a high of around Rs 6,300 per share, the market capitalisation was around Rs 1 lakh crore. In the last 24 hours, it lost close to around Rs 70,000 crore in terms of market capitalisation.
As IRCTC continues its recent slide, IIFL has downgraded the stock to a 'sell' at a target price of Rs 4,100. IIFL said risk-reward is extremely unfavourable after the big move.
Also Read:
The note said after IIFL initiated the coverage on the stock, it is up 210 percent and has massively outperformed the Nifty. After the big outperformance, the stock now trades at 88 times FY23 price to earnings and hence, it seems the risk-reward is unfavourable.
According to the IIFL note, their Blue sky scenario target is just 7 percent away from the current market price and hence they see the upside very much limited.
After this big move on that particular stock, at the current price, the stock implies that that the company is going to generate free cash flow of almost 27 percent for the next seven to eight years and it expects this is something which is not sustainable.
Additionally, after the big move with the market capitalisation of almost Rs 1 lakh crore, now there is a risk of even the government diluting some of the stakes at such a high price and hence that could be a bit of an overhang as well.
next story

Market Movers

Currency

CompanyPriceChng%Chng