Indian Railway Catering And Tourism Corporation Share Price

Indian Railway Catering And Tourism Corporation Ltd. Fundamental Analysis

In this guide, we will examine the business model and industry fundamentals of IRCTC to help determine if it is an appropriate investment for you.

Indian Railway Catering And Tourism Corporation Ltd.

The Indian Railway Catering and Tourism Corporation is a public sector undertaking established by the Government of India in 1999. It operates under the administrative control of the Ministry of Railways and provides ticketing, catering, and tourism services for the state-owned Indian Railways.

In 2019, the company was listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) with a 67% shareholding by the Government. The corporation has around 66 million registered users as of December 2023, booking an average of 739000 tickets per day.

IRCTC’s services mainly include online ticketing through its website, smartphone apps, and SMS. They also provide railway catering services as well as packaged drinking water at railway stations & trains. Further to this, IRCTC offers Bharat Gaurav Tourist Train packages and Cruise Packages among other domestic as well as international tour packages.

Is the Railway Sector a Goldmine Investment?

The Indian railway sector, due to its extensive network and important role in the economy of this country, is regarded as an important area for investment. It is among the largest railway networks internationally having a great demand for passenger and freight services.

Various investment opportunities have been opened due to the modernization and expansion of railways by the Indian government.

Among other options, RCTC can be chosen as a good alternative for investment. IRCTC's service range includes online ticketing, catering, and tourism has been growing steadily over time.

As of June 2, 2024, IRCTC share price was ₹1,020.35. The company has a market capitalization of ₹81,628 Cr indicating its substantial presence in the market. It could be an interesting long-term growth opportunity for investors with its P/E ratio of 73.24.

Who are IRCTC competitors in the Railway Sector?

In the railway sector of India, IRCTC is essentially a monopoly. There really isn't any significant competitor that offers the same breadth of services and nationwide reach. IRCTC dominates the online ticketing, catering, and tourism services related to Indian Railways, making it the go-to platform for millions of passengers daily. So, in simple terms, when it comes to railway services in India, IRCTC stands tall without any real competition.

History of IRCTC Limited

Here’s a brief history of IRCTC:

• Incorporation: The Indian Railway Catering and Tourism Corporation (IRCTC) was established on 27 September 1999 as a public sector undertaking completely owned by the Government of India through the Indian Railways. It was listed on the National Stock Exchange and Bombay Stock Exchange in 2019.
• Product Range: IRCTC provides a diverse range of services including online ticketing, catering, and tourism. It offers online ticketing through its website, smartphone apps, and SMS. It also provides catering services to railways and packaged drinking water at railway stations and on trains.
• Infrastructure: IRCTC operates under the administrative control of the Ministry of Railways. It has exclusive rights for onboard catering of food on all trains operated by the Indian Railways.
• Certifications: IRCTC was classed as a Miniratna public corporation in May 2008, which allowed it a certain degree of financial autonomy.
• Awards and Recognition: While specific awards and recognitions are not mentioned in the search results, IRCTC’s significant contributions to the railway sector and its consistent growth over the years have earned it a very solid reputation in the market.

Company Profile of IRCTC Limited

Pros:

• Monopoly: IRCTC enjoys a monopoly in online railway ticketing and catering services on trains, which provides a stable revenue stream.
• Government Backing: Being a public sector undertaking, it has strong government support, which adds to its credibility.
• Growth Potential: With the Indian Railways being a major mode of transportation, IRCTC has significant growth potential, especially as travel recovers post-pandemic.
• Financial Health: The company is almost debt-free, and it has been showing an increasing trend in quarterly net profits. It also has a return on equity of more than 11%.

Cons:

• Market Volatility: The stock has experienced volatility, with significant price fluctuations in recent times.
• Pandemic Impact: The COVID-19 pandemic has had an impact on its business, although recovery is underway.
• High Valuation: The stock is considered to be trading at a high multiple of its book value, which might be a concern for value investors.
• Promoter Holding: There has been a decrease in promoter holding, which could be viewed negatively by some investors.

The Finances

Here’s a summary of IRCTC Limited’s financial information as of June 2024:

Shareholding pattern of IRCTC Ltd.

As of the latest data, the shareholding pattern of IRCTC Ltd. is as follows:

• Promoters: Hold 62.4%
• Foreign Institutional Investors (FII): 8.1%
• Domestic Institutional Investors (DII): 12.7%
• Public: 16.8%

Peer Multiple Comparison

When it comes to assessing IRCTC through a peer multiple comparison, it's important to note that IRCTC operates in a somewhat unique space within the railway sector.

Unlike many companies that have direct competitors for comparison, IRCTC stands as a significant player in its own right without direct competitors offering the same range of services and nationwide reach in the railway sector.

Therefore, while peer multiple comparisons are a common tool for evaluating companies, in the case of IRCTC, there are no direct competitors to compare against. Instead, analysts often look at other metrics and factors to gauge IRCTC's performance and value within its specific market context.