Indian Railway Catering and Tourism Corporation (IRCTC) has announced its financial results for the third quarter of FY25, showcasing steady growth across key metrics. The company’s net profit climbed by 14% year-on-year (YoY) to ₹341 crore, compared to ₹300 crore in the same quarter last year. However, despite these positive numbers, the stock faced a decline after the earnings announcement. Let’s break down what’s driving IRCTC’s growth and whether it presents a strong investment case.
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IRCTC Q3 results: Key financial highlights
IRCTC’s Q3FY25 results indicate a solid financial performance:
| Financial Metric | Q3FY25 | Q3FY24 | YoY Growth |
| Net Profit | ₹341 Cr | ₹300 Cr | 14% |
| Revenue | ₹1,225 Cr | ₹1,115 Cr | 10% |
| EBITDA | ₹417 Cr | ₹394 Cr | 5.7% |
| EBITDA Margin | 34% | 35.3% | -130 bps |
| Total Expenses | ₹825 Cr | ₹740 Cr | 11% |
Sequentially, IRCTC’s profit grew by 11% from ₹308 crore reported in Q2FY25. The company’s revenue also increased 15% quarter-on-quarter (QoQ) from ₹1,064 crore, showing strong operational momentum.
However, EBITDA margins saw a 130 basis points (bps) decline, falling from 35.3% to 34%. The rise in expenses, which surged 11% YoY, played a significant role in this margin contraction.
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Segment-wise performance: Tourism leads the way
IRCTC operates across four primary segments: Catering, Rail Neer, Internet Ticketing, and Tourism. Here’s how each performed in Q3FY25:
| Segment | Revenue (Q3FY25) | Revenue (Q3FY24) | Growth |
| Catering | ₹555 Cr | ₹508 Cr | 9.25% |
| Rail Neer | ₹96.4 Cr | ₹84 Cr | 14.76% |
| Internet Ticketing | ₹354 Cr | ₹335 Cr | 5.67% |
| Tourism | ₹224 Cr | ₹193 Cr | 16.06% |
Tourism emerges as the fastest-growing segment
Among the different segments, tourism saw the highest growth at 16.06%, rising from ₹193 crore to ₹224 crore. This growth reflects an increasing preference for IRCTC’s tour packages and travel-related services.
Meanwhile, the catering segment remains IRCTC’s largest revenue generator, contributing ₹555 crore, marking a 9.25% YoY increase. Internet ticketing, a crucial revenue source, recorded moderate growth at 5.67% YoY, reaching ₹354 crore.
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Dividend announcement: What investors need to know
IRCTC declared a second interim dividend of ₹3 per share, with February 20, 2025, as the record date for determining eligible shareholders. This follows an earlier dividend payout of ₹4 per share in November, making it a consistent dividend-paying PSU.
The latest dividend represents a 150% payout on the face value of ₹2 per share, underlining IRCTC’s commitment to rewarding investors.
Market reaction: Stock dips despite strong results
Despite the 14% increase in net profit and double-digit revenue growth, IRCTC’s stock closed 2.88% lower at ₹715.25 on the BSE after the Q3 results were announced. On the NSE, the stock ended at ₹773.70, down 2.94%, underperforming the benchmark Nifty, which fell 1.32%.
This decline indicates that investors were possibly concerned about narrowing EBITDA margins and rising expenses. The stock has also witnessed a 20.04% decline over the last 12 months, reflecting broader market sentiment towards PSU stocks and valuation concerns.
Should you invest in IRCTC?
IRCTC remains a strong PSU player with steady growth in revenue and profits. However, some key factors to consider before investing include:
Revenue Growth: 10% YoY and 15% QoQ growth indicates strong demand.
Dividend Payout: Regular interim dividends add to shareholder value.
Tourism Boom: The highest growth in tourism signals a post-pandemic rebound.
Declining Margins: EBITDA margin contraction raises profitability concerns.
Stock Underperformance: 20% decline in the past year suggests market skepticism.
For long-term investors, IRCTC’s monopoly in online railway ticketing and tourism growth presents a compelling case. However, short-term traders should be cautious given market volatility and fluctuating margins.
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Conclusion
IRCTC’s Q3FY25 results reflect a company that is growing steadily but facing cost pressures. With a 14% rise in net profit, 10% revenue growth, and a strong dividend policy, the fundamentals remain strong. However, margin declines and stock volatility highlight the need for careful investment decisions.
For those with a long-term perspective, IRCTC’s monopoly in railway ticketing, expansion in tourism, and strong cash flow generation make it a solid bet. But short-term investors might want to watch how the stock reacts in the coming months.
