IRCTC shares dip after withdrawal of data monetization tender. Should you buy?

According to stock market experts, current sell-off in IRCTC shares is mainly caused by the withdrawal of tender for data monetization move by the Indian Railways’ PSU. They said that the stock may further go down up to ₹660 to ₹650 apiece levels. However, they maintained that market was well aware that data monetization by a state-owned company like IRCTC was not that easy and hence it was ready for profit-booking and once the government PSU informed Indian exchanges about the decision on data monetization, profit-booking ahs triggers. They said that the recent rise in the stock was speculative and now the stock is standing on its actual fundamentals. They said that one can buy the stock in ₹660 to ₹675 range maintaining stop loss at ₹620 for six month target of ₹900.

Why IRCTC shares are falling?

Speaking on the reason for IRCTC share price fall, Ravi Singhal, CEO at GCL Securities said, “IRCTC shares are falling because the recent reason for rise in the counter no more exists. The IRCTC management has informed exchanges that it has withdrawn the e-tender for appointment of consultant for data monetization due to withdrawal of Personal Data Protection Bill 2018 by the Government of India. So, the speculation in the stock has stopped and now the market is expected to discount the price rise taken place in the counter in recent sessions.”

Expecting further downside in IRCTC shares, Sumeet Bagadia, Executive Director at Choice Broking said, “IRCTC shares are in the range of ₹640-650 to ₹725 to ₹750 apiece levels. It may further go down as the stock is looking slightly weak on chart pattern. However, its lower support is expected to remain maintained and hence one can initiate buying around ₹660 apiece levels for immediate target of ₹725 levels.” Sumeet Bagadia strong rebound in IRCTC stocks is quite possible from its lower levels.

IRCTC share price target

Advising positional investors to take advantage of this fall in IRCTC shares, Ravi Singhal of GCL Securities said, “Barring the recent speculative price appreciation, fundamentals of the company are still strong. The Indian railways is going to further expand its online ticketing base leading to conducive milieu for the state-owned company. One can initiate coverage in IRCTC in ₹660 to ₹375 range for the target of ₹900 by the end of this financial year.” Ravi Singhal advised long term investors to maintain stop loss at ₹620 and hold the stock for ₹900 target.

On 26th August 2022, IRCTC informed exchanges about withdrawal of tender for data monetization citing, “In reference to the above mentioned communication, it is to further inform that due to withdrawal of Personal Data Protection Bill 2018 by the Government of India, the above referred E-tender for appointment of Consultant for Data Monetization of Indian Railway/ IRCTC floated by IRCTC, on 29th July, 2022 has been withdrawn.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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