IRCTC dips by 30% in just two days after scaling an all-time high of Rs 6393.

Trending company- IRCTC.

by 5paisa Research Team Last Updated: Apr 04, 2022 - 12:58 pm 48.6k Views

Market cap tumbles from the celebrated Rs 1 trillion mark to Rs 0.74 trillion in mere two days.

Indian Railway Catering & Tourism Corporation Ltd (IRCTC) has been nothing but a dramatic story in recent times. A story that would put any investor in a state of dilemma whether to hold the scrip or exit. For many, it is the question of bargain hunting. On October 20, 2021, the stock hit a lower circuit twice.

Let's have a look at the turn of events in the stock over last month.

The bull rally

The stock has been a lottery ticket in the last month, trailing from October 18, 2021. The tremendous rally started from Rs 3707 to create a fresh 52-week high of Rs 6393 which generated a return of about 72% in just a month. The railways had witnessed a robust ticket booking in the September quarter. And as the IRCTC has a near-monopoly in the online ticket booking segment, the stock inflated to new skies.

Two day's story

The stock has dipped over 30% which shows a healthy correction after reaching a peak. The government announcement of the appointment of a regulator complemented the bearish sentiment. Above all, the stock was added to the F&O ban list by NSE as the stock had crossed the 95% market-wide position limit. According to the NSE, no fresh positions are allowed, only off-setting positions can be taken in the stock. As many speculators were long in October futures, the only option they have is to take a short position and hence a selling pressure can be seen in the stock.

It would be wise to wait for the volatility to die down before initiating a buy on the bargain. The fundamentals appear good in medium to long-term investments.

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