In Tuesday’s trading session, shares of the Indian Railway Catering and Tourism Corporation (IRCTC) experienced a notable surge of 2.65%, reaching ₹719.90 per share. This uptick came in response to the Ministry of Railways (Railway Board) granting approval for the company to engage in long-term tenders spanning 7 years, with an initial term of 5 years and the potential for an additional 2 years based on satisfactory performance, through the clustering of trains.
Regulatory Filing Details: However, in a regulatory filing made on Monday, IRCTC disclosed that it has received advice from the Ministry of Railways not to proceed with the initially proposed long-term tenders (5+5 years) for catering on trains. This decision is aimed at ensuring the smooth implementation of the YSA policy for providing passenger services on trains.
IRCTC’s Role and Services: IRCTC holds the exclusive authorization from the Indian government to provide online railway tickets, catering services to railways, and packaged drinking water at railway stations and trains in India. The company has diversified its offerings to include a range of tourism and hospitality services, such as luxury train tours, hotel bookings, and holiday packages.
Stock Performance and History: IRCTC made a strong debut on October 14, 2019, listing at a premium of 127.7% over the IPO price of ₹320. The stock has been trading on an ex-split basis with a 1:5 ratio since October 29, 2021. Over the last six months, the stock has delivered a 16% return. In the long term, it has generated a remarkable return of 156% in the last three years and an impressive 1006% over the last five years.
Financial Highlights: In Q2FY24, IRCTC reported a 30% improvement in its standalone net profit, reaching ₹294 crore. The revenue from operations in the same quarter came in at ₹995.3 crore, marking a growth of 23.5% YoY. Specifically, revenue from the catering segment saw a 29% increase to ₹431.5 crore, while revenue from the internet ticketing segment jumped 9% to ₹327 crore.
Ownership Structure: As of Q2FY24, the Indian government owns 62.4% of the shares in IRCTC. Foreign portfolio investors and domestic institutional investors hold 7.1% and 10.5%, respectively, while regular shareholders own 20%.
Current Trading Status: As of 01:00 PM, the stock was trading with a gain of 1.04% at ₹708.65 per share.