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🚆 IRCTC Ltd. – Long-Term Investment Analysis (FY2026 Outlook & Beyond)

Lesson 194/225 | Study Time: 15 Min

Course: Top Quality Companies

🚆 IRCTC Ltd. – Long-Term Investment Analysis (FY2026 Outlook & Beyond)

📌 Company Overview

Indian Railway Catering & Tourism Corporation Ltd. (IRCTC) is a Navratna PSU under Ministry of Railways, enjoying monopoly in several services including online ticketing, catering, packaged drinking water (Rail Neer), and niche tourism offerings like Bharat Gaurav trains and Maharajas' Express.

IPO in 2019 delivered multi-fold returns (8x in 6 years).
Consistently profitable with industry-leading EBITDA margins (30%+).
Strong dividend distribution track record (40%+ of profits shared).

🌍 Industry & Growth Prospects

Indian Railways Expansion: More Vande Bharat trains, station modernization, and tourism circuits will expand IRCTC’s core business scope.
Digital Adoption: ~88% of reserved tickets are booked online, ensuring IRCTC remains the digital gateway.
Tourism Recovery: Increasing domestic travel demand and luxury tourism trains (Golden Chariot, Bharat Gaurav, Maharajas’ Express).
Packaged Water (Rail Neer): Rising demand with new bottling plants in pipeline (Danapur, Ambernath, Ranchi, Mysuru).

📊 Financial Performance

Revenue & Profit Growth

Year	Revenue (₹ Cr)	Profit (₹ Cr)	Margin
FY2016	1,382	197	14%
FY2019	1,870	309	17%
FY2021	783	193	25%
FY2023	3,541	1,005	28%
FY2025	4,675	1,313	28%
Tr. FY2026	4,659	1,336	29%

📌 9-Year CAGR:

Revenue: 14.5% | Profit: 23.5% | EPS: 22.6%

Segmental Mix (Q1 FY26)

Segment	Revenue (₹ Cr)	Growth YoY	Margin
Internet Ticketing	360	+9%	84% EBITDA
Catering	547	-2%	13.1%
Rail Neer	106	Flat	Stable
Tourism	148	+21%	8.7%

👉 Ticketing remains the largest profit driver, while Tourism shows strong recovery momentum.

Profit Margins (History)

Stable at 25–36% over the last 5 years.
Q1 FY26 margin: 28.5%, improving 230 bps YoY.

📈 Valuation Trends

Historical PE Band

FY2021–FY2025: 40–168x PE.
Current range FY2026E: 39–49x PE.
IRCTC trades at premium due to monopoly, asset-light model, and steady dividend.

PBV Band

Range: 14x – 26x PBV in recent years.

🔎 Growth & Estimates

FY2026–FY2035 Projections

Year	Revenue (₹ Cr)	Profit (₹ Cr)	EPS (₹)	Book Value (₹)	Blended Fair Value (₹)
FY2026E	4,909	1,394	17.5	60	~1,068
FY2030E	8,585	2,292	29	94	~1,724
FY2035E	15,130	4,040	51	148	~2,900

⚖️ Peer Comparison (Travel & Tourism PSU/Private)

Company	FY25 Revenue (₹ Cr)	Margin	Valuation (PE)
IRCTC	4,675	28%	40–69x
Indigo (InterGlobe Aviation)	68,000+	8–10%	20–25x
EaseMyTrip	~600	15%	35–40x

📌 IRCTC enjoys superior margins and government-backed monopoly, justifying its premium valuations.

⚡ Key Strategic Insights

Rail Neer Expansion: 3 new plants expected, targeting 2 million bottles/day.
Tourism: New circuits like Shivaji Maharaj Circuit, Dev Bhoomi Kedarnath, and Bharat-Bhutan Yatra planned.
Digital Play: Payment Aggregation license (RBI approval pending) could open new B2C monetization streams.
E-catering Growth: +30% YoY with Swiggy/Zomato tie-ups.

📉 Risks

Regulatory risks (pricing of ticketing convenience fees & Rail Neer).
Arbitration liabilities in catering contracts (court cases pending).
Slower revenue growth in catering despite train expansions.

📌 Portfolio Weightage

Current Price: ₹711
Suggested Allocation: 1.5% (Strategic Weight)
Factor Adjusted Technical Weight: 1.28%

📊 Technical View

Support (Buy Zone): ₹509
2-Year Target: ₹1,305
Strong consolidation phase may lead to multi-year breakout.

🎯 Conclusion – Long-Term Risk & Reward

IRCTC remains a steady compounder with monopoly business, high margins, strong cash flow, and consistent dividends. While near-term growth in catering & Rail Neer is muted, ticketing and tourism are driving stability. With digital initiatives, tourism push, and Railways expansion, IRCTC is expected to deliver double-digit CAGR returns till FY2035.

👉 Investor Action: Hold for long-term wealth creation. Add near ₹509, and aim for ₹1,305 in 2 years.

🔒 Disclosure

This blog is created for educational purposes only. Investors must do their own due diligence before investing.

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