Indian Railway Catering and Tourism Corporation Ltd.'s wild ride continues as the stock reversed from its record high and multiple rallies over the past month.
Shares of the online railway ticketing platform slumped as much as 14.3% in early trade on Monday. The stock ended the day more than 12% down.
On Oct. 19, it had gained more than 8.8% to a record high of Rs 6,396.3 apiece. That propelled the company's market value to Rs 1 lakh crore, albeit briefly. The scrip then dropped sharply and ended in losses. Over the next trading session, it had lost 30% from its all-time high.
Santosh Meena, head of research at Swastika Investmart, a listed brokerage, said valuations had been "overstretched" as there was "euphoria" in this stock over the last few days.
"We know the market is not charitable enough to make you easy money every day. Therefore, we are seeing a sharp correction in this counter to take out excesses. There is some buzz that the government may also dilute some stake to get the benefit of the recent rally in this counter," he said.
Shares of IRCTC touched an intraday low of Rs 3,961.1 apiece but pared some of the losses to end at Rs 4,029 apiece. Of the seven analysts tracking the company, six have a 'buy' rating, while one recommends a 'sell', according to Bloomberg data. The 12-month price target implies an downside of 10%.
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