1. At a Glance
Ladies and gentlemen, IRCTC—the government’s most profitable travel agent, chef, and water bottle distributor—has once again proven that monopoly is the best business model ever invented. With amarket cap of ₹56,412 crore, this Navratna PSU continues to sell chai, tickets, and dreams to 1.4 billion Indians every day. Thestock trades at ₹705, down 12% over the past year (probably because even bhakts are tired of paying convenience fees).
InQ2FY26, IRCTC served₹1,146 crore in salesand₹338 crore in PAT, growing 7.7% and 9.7% YoY, respectively. TheROE stands at a godly 37.2%, ROCE at 49%, and debt at a laughable₹78 crore—the kind of numbers that make private companies cry in Excel.
As Bhagavad Gita says,“Karmanye vadhikaraste, ma phaleshu kadachana”—you have control only over your actions, not the results. But IRCTC seems to control both: the ticket, the food, and the profit.
2. Introduction
IRCTC isn’t just a PSU; it’s thebeating heart of India’s train travel economy. Every time you book a train ticket, curse the captcha, and still end up paying ₹20 in “convenience fee,” IRCTC quietly earns its daily bread (and butter chicken).
Over two decades since its incorporation in 1999, this Navratna has transformed from a railway subsidiary to ahospitality and tech hybrid. In FY24, itssales hit ₹4,799 croreandPAT stood at ₹1,337 crore, growing consistently post-COVID. The return ratios remain stellar, the dividend payout generous (46%), and the monopoly eternal.
And just when you thought it couldn’t get any better, IRCTC started serving paneer tikka to babus in government offices and added QR-code ticketing in metros under the“One India–One Ticket”scheme. A company that started with chai at ₹5 now delivers IPO-level returns—and lassi at ₹30.
But, with power comes SEBI fines, CESTAT orders, and Ministry circulars. In the last quarter alone, IRCTC was fined for board composition lapses, fought andwon a Supreme Court case, and still managed to declare aninterim dividend of ₹5/share. For most PSUs, that’s a decade’s worth of drama—IRCTC does it before lunch.
3. Business Model – WTF Do They Even Do?
Think of IRCTC asfour PSUs in a trench coat—each doing something that every Indian has experienced at least once.
- Catering (47% of FY24 revenue):IRCTC feeds 16 lakh passengers daily. That’s more meals per day than most food delivery apps handle, minus the influencer marketing. It runs 1,265 trains, including all the Vande Bharats, Rajdhanis, and Shatabdis. Regional menus? Check. Paneer Makhani in Delhi, Rasam in Chennai, and heartburn everywhere.
- Internet Ticketing (30%):The IRCTC website handles 28,000 tickets per minute. In FY24, 82.68% of all reserved tickets in India were booked through its platform. It’s India’s largest e-commerce site, and yes—it still crashes during Tatkal.
- Tourism (16%):From Aastha trains to Tejas Express and Ramayana Yatras, IRCTC does it all. In FY24, it carried 5.48 lakh passengers on religious tours. If heaven had a booking portal, IRCTC would probably run that too.
- Rail Neer (7%):India’s most patriotic water bottle. With 19 plants and a 17.68 lakh litre daily capacity, Rail Neer ensures that every station has at least one cold bottle of liquidity.
So, what’s the business model? Simple: be indispensable to the Indian middle class. You don’t compete when your users have no choice.
4. Financials Overview
| Metric | Q2FY26 | Q2FY25 | Q1FY26 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,146 | 1,064 | 1,160 | 7.7% | -1.2% |
| EBITDA (₹ Cr) | 404 | 373 | 397 | 8.3% | 1.8% |
| PAT (₹ Cr) | 338 | 308 | 330 | 9.7% | 2.4% |
| EPS (₹) | 4.27 | 3.85 | 4.13 | 10.9% | 3.4% |
Annualised EPS = ₹4.27 × 4 =₹17.1, giving aP/E of ~42.1×at CMP ₹705.
Commentary:Even in a slow quarter, IRCTC earns more than most travel startups combined. The margins are so stable, it’s like Excel meditation. The only real risk is if the government decides to privatize the chai stalls—then maybe, just maybe, margins will go from 33% to 32%.
5. Valuation Discussion – Fair Value Range Only
Method 1: P/E ApproachEPS (TTM): ₹17.1Industry P/E: 42×Assuming a range of 35×–45×, fair value = ₹17.1 × (35–45) =₹600–₹770 per share
Method 2: EV/EBITDAEV = ₹53,566 Cr; EBITDA = ₹1,604 CrEV/EBITDA = 33.4× (expensive PSU energy here)Fair range assuming 25×–30× multiple = ₹44,000–₹48,000 Cr EVEquivalent price range:₹620–₹720 per share
Method 3: DCF (Simplified)Assuming 10% growth, 10% discount rate, and stable FCF of ₹700 Cr/year → value around₹650–₹730/share
📜Disclaimer:This fair value range (₹600–₹770) is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
If IRCTC had a Netflix series, it’d be called“Railways: Bureaucracy and Buffet.”
- Supreme Court Win (Nov 2025):The apex court set aside an arbitral award, saving IRCTC from hefty caterer claims. God’s justice, but with legal fees.
- Interim Dividend:Board declared ₹5/share as interim dividend, because PSU = Permanent Source of Upward payouts.
- New Rail Neer Plant:Commissioned in Vijayawada (72,000 bottles/day), with more at Ambernath & Danapur. Someone’s staying hydrated.
- One India, One Ticket:IRCTC partnered with NCRTC and DMRC for metro and regional rail QR ticketing. Now you can go from Meerut to Noida with one app—and the same CAPTCHA.
- Navratna Upgrade:In March 2025, IRCTC became a Navratna PSU—basically PSU Hogwarts’ highest house ranking.
