What’s inside:
This article discusses the recent performance of IRCTC shares and the factors affecting their growth.
IRCTC’s shares have not been performing well lately. Over the past three months and even the last ten months, they have lagged behind the Nifty index. Despite having a strong position in the domestic travel and tourism industry, the company’s growth seems limited due to its mature business segments.
In the first quarter of the financial year 2025-26, IRCTC saw a revenue growth of just 4% year-on-year. While their tourism business showed good growth, the catering segment faced a decline, possibly due to fewer special election trains running this year compared to last. Upgrades at certain stations might have also impacted their catering business negatively.
The company is working on establishing new plants in Danapur and Ambernath, which should support its Rail Neer business. There have been some changes in the supply of bottled water on trains, but the rise in internet ticketing has helped maintain a positive outlook for growth.
More Vande Bharat trains are being introduced, which is expected to positively impact IRCTC’s business. While catering has seen some challenges, other segments are showing improved margins. With the increasing number of sleeper trains over the next three years, IRCTC may see further support for its business.
Despite concerns about an economic slowdown, IRCTC believes it will benefit from the dedicated freight corridor, which could increase passenger train services. The government’s budget measures to reduce taxes and GST will likely lead to higher consumption, benefiting companies like IRCTC. The company’s shares have dropped over 23% in the past year.
Summary:
- IRCTC shares are underperforming compared to the market.
- Revenue growth is slow at just 4% for the recent quarter.
- The company is expanding its Rail Neer business with new plants.
- More Vande Bharat trains are expected to boost business.
- Government tax cuts may enhance consumption, aiding IRCTC.