Why Are IRCTC Shares Lagging Behind RVNL IRFC and Other Railway Stocks?

Currently, IRCTC (Indian Railway Catering and Tourism Corporation) shares are lagging behind other railway stocks like RVNL (Rail Vikas Nigam Limited), IRFC (Indian Railway Finance Corporation), and others. This performance can be attributed to different market factors and expectations, despite IRCTC being a significant player in the railway tech sector.

Market Performance Comparison

While RVNL and IRFC have seen substantial gains in recent months, IRCTC has struggled to maintain momentum. According to stock market experts, this divergence can be explained by the different market sectors they belong to. IRCTC, as a railway tech stock, primarily gains traction from online rail ticket booking, whereas RVNL and IRFC represent infrastructure and financial arms of the railway sector, respectively.

For instance, RVNL's share price has surged by 85% in the last month, while IRFC's share price has risen by nearly 45%. Ircon International, another railway infrastructure firm, has witnessed a more than 30% increase in its share price. However, IRCTC's share price has languished and has not gained momentum despite these positive developments.

Government Divestment and Market Sentiment

The government's continued divestment of its stake in IRCTC also contributes to the current market sentiment. However, despite this, IRCTC shares have been favored by institutional investors (DIIs) in recent sessions, with the potential to reach levels between 760-770 in the next 3-4 months.

Impact of Uneven Market Sentiment

Fundamentally, the market sentiment towards IRCTC is heavily influenced by the announcement of major rail infra projects and related developments. Speculation surrounding the budget for 2023, which will be presented on 1st February, has created buzz in the stock market. Stocks like RVNL, IRFC, IRcon International, and others are expected to benefit if certain railway infra projects are announced, while IRCTC, being a tech-focused railway player, may not see the same level of benefit.

Market analysts and experts suggest that the upcoming 2-3 years will be favorable for mid-cap, small-cap, and micro-cap shares. However, with its potential upside, IRCTC remains a watchful share for long-term investors, despite its current lagging performance.

Conclusion

In conclusion, the current lagging performance of IRCTC shares can be attributed to factors such as the market segment they belong to, government divestments, and speculation around the upcoming budget. While other railway stocks like RVNL and IRFC are performing well due to infrastructure and financial investment-related developments, IRCTC may not benefit from the same degree of positive momentum. However, the potential upside and strong institutional investor support make it a promising stock for the long term.