PL Capital Backs IRCTC Growth Story, Maintains Buy Call

Mumbai | May 30 – “Short-term volatility doesn’t shake long-term conviction—IRCTC remains one of the most unique and profitable railway-linked plays in India,”
noted PL Capital in its latest report.

PL Capital has reaffirmed its ‘Buy’ rating on Indian Railway Catering and Tourism Corporation (IRCTC), maintaining a target price of ₹864, even as the company posted a soft Q4FY25 performance. The stock, which currently trades at ₹775, offers promising upside, driven by IRCTC’s dominant position in rail ticketing, rising e-catering demand, expanding tourism services, and future digital monetisation.

While Q4 margins missed estimates, the company’s core segments—especially internet ticketing and tourism—remain resilient. IRCTC’s adjusted PAT rose 13.1% YoY to ₹312.6 crore, aided by an exceptional gain of ₹45.7 crore, even as EBITDA margins fell to 30.4% from 31.5% a year ago.

Key Financials 

5 Key Takeaways from the Management Call

1. Catering: Flat This Quarter, But Room to Grow
   Revenue in the catering division was unchanged YoY at ₹529 crore due to no new Mahakumbh-related train services this year. However, a 13% CAGR is projected, led by e-catering, private sector contracts, and new Vande Bharat routes.
2. E-Catering Gathers Steam
   FY25 saw e-catering revenue rise to ₹54 crore from ₹33 crore in FY24—a 63% jump. The Q4 contribution alone was ₹15 crore, showing traction from digital ordering and improved logistics.
3. Digital Push: Payment Gateway in Sight
   IRCTC expects to receive in-principle approval from the RBI for a payment aggregator licence within the next 2–3 months, enabling new monetisation channels beyond just the convenience fee.
4. Premium Trains Are Paying Off
   Tejas Express recorded 93% occupancy, while Bharat Gaurav trains contributed ₹277 crore in FY25 with around 8% margins. These high-end services are emerging as strong profitability drivers.
5. Tourism Shows Robust Growth
   Tourism revenue jumped 38.2% YoY in Q4 to ₹274 crore, with EBIT margins improving to 18.1% from 9.5%. Premium offerings like Maharaja Express and religious packages are gaining traction.

Bottom Line: Fundamentals Remain Strong

Despite the margin miss in Q4, IRCTC’s fundamentals remain solid. Internet ticketing, with its 82.4% EBIT margin, continues to be the backbone of profitability. The Rail Neer segment is expected to gain scale with the commissioning of three new bottling plants.

Commenting on the broader outlook, Jinesh Joshi, Senior Research Analyst at PL Capital, said: “Despite near-term margin headwinds, IRCTC’s business model remains one of the most unique and defensible in India’s public sector space. The long runway for growth in e-catering, premium tourism, and fintech makes the stock an attractive long-term bet.”

Valuation and Outlook

PL Capital continues to value IRCTC at 44x FY27E EPS, reflecting its monopoly in online ticketing, robust balance sheet, and potential for digital revenue streams. A **Sales and PAT CAGR of ~11%

Read the full report here