IRCTC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | IRCTC | Market Cap | 43,164 Cr. | Current Price | 540 ₹ | High / Low | 820 ₹ |
| Stock P/E | 31.2 | Book Value | 53.2 ₹ | Dividend Yield | 1.58 % | ROCE | 49.0 % |
| ROE | 37.2 % | Face Value | 2.00 ₹ | DMA 50 | 559 ₹ | DMA 200 | 645 ₹ |
| Chg in FII Hold | -2.33 % | Chg in DII Hold | 0.84 % | PAT Qtr | 387 Cr. | PAT Prev Qtr | 338 Cr. |
| RSI | 46.5 | MACD | 0.22 | Volume | 11,17,918 | Avg Vol 1Wk | 13,96,872 |
| Low price | 493 ₹ | High price | 820 ₹ | PEG Ratio | 1.27 | Debt to equity | 0.02 |
| 52w Index | 14.3 % | Qtr Profit Var | 13.3 % | EPS | 17.8 ₹ | Industry PE | 44.2 |
Core Financials:
IRCTC demonstrates strong fundamentals. ROE is excellent at 37.2% and ROCE at 49.0%, reflecting high efficiency. EPS of ₹17.8 is solid, supported by quarterly PAT growth (₹387 Cr vs ₹338 Cr, +13.3%). Debt-to-equity is very low at 0.02, highlighting a debt-free balance sheet.
Valuation:
Stock P/E of 31.2 is lower than industry average (44.2), suggesting undervaluation. PEG ratio of 1.27 indicates fair growth alignment. Price-to-book is ~10.1, expensive relative to intrinsic value. Dividend yield of 1.58% provides moderate income support.
Business Model & Health:
IRCTC operates in railway catering, ticketing, and tourism services, benefiting from monopoly-like positioning in online railway bookings. Competitive advantage lies in government backing, diversified services, and strong profitability. Overall health is robust, though growth is tied to railway sector expansion.
Entry Zone:
Ideal entry zone: ₹510–₹530. Current price ₹540 is near fair entry. Long-term holding is highly viable given strong fundamentals and sector monopoly.
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Positive
- Excellent ROE (37.2%) and ROCE (49.0%)
- Debt-free balance sheet (0.02 debt-to-equity)
- P/E lower than industry average (31.2 vs 44.2)
- Strong quarterly PAT growth (+13.3%)
- DII holdings increased (+0.84%)
Limitation
- Price-to-book (~10.1) expensive
- RSI 46.5 indicates neutral momentum
- FII holdings reduced (-2.33%)
- Growth tied to railway sector performance
Company Negative News
- Decline in FII holdings (-2.33%)
- Technical weakness: price below 200 DMA (645 vs 540)
Company Positive News
- Quarterly PAT growth (₹387 Cr vs ₹338 Cr)
- DII confidence improved (+0.84%)
- Technical indicators show mild bullishness (MACD 0.22)
Industry
Railway and tourism services sector trades at industry P/E of 44.2, supported by rising travel demand and government initiatives. IRCTC trades at a discount, offering strong fundamentals and monopoly advantage compared to peers.
Conclusion
IRCTC is fundamentally strong with excellent efficiency, debt-free balance sheet, and monopoly positioning. Rating: 4.2. Entry near ₹510–₹530 is preferable. Long-term holding (5+ years) is justified, with exit strategy around ₹800–₹820 if fundamentals stagnate.
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