IRCTC - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: IRCTC (Indian Railway Catering and Tourism Corporation Ltd.)

Investment Rating: 4.2

🧾 Fundamental Overview

ROE: 37.2% & ROCE: 49.0% — stellar returns on capital and equity, indicative of a highly efficient business.

EPS: ₹16.4 — strong profitability for its segment.

Debt-to-Equity: 0.02 — virtually debt-free, reinforcing financial resilience.

Dividend Yield: 0.95% — modest, but hints at consistent cash generation.

P/E of 45.9 vs Industry PE of 36.5 — priced at a premium, but arguably justified given monopoly status and growth visibility.

Note: PEG ratio is missing, which makes full growth-adjusted valuation analysis incomplete, but EPS and sector trends still support quality.

📉 Technical & Price Trends

RSI: 32.1 — approaching oversold zone, may hint at bottoming-out.

MACD: -8.20 — bearish signal in short-term; correction underway.

Current Price below both DMA 50 & 200 — technical weakness; confirms downtrend.

Volume slightly below average — lacks momentum, but no signs of capitulation.

🎯 Ideal Entry Zone: ₹680 – ₹720 Positioning here offers a decent margin of safety and aligns with key supports and recent price action lows.

🧭 Holding or Exit Strategy

✅ Suggested Holding Period: 3–5 years

IRCTC is a rare blend of monopoly, digital infrastructure, and public sector backing — ideal for compounding through long-term growth in domestic travel.

Hold If

ROE remains above 30%

EPS grows to ₹18+ in the next 2–3 quarters

PAT crosses ₹350 Cr. per quarter

Tourism and railway tech/digitization trends accelerate

🚪 Exit Strategy

Partial Exit: Near ₹960–₹980 if price rebounds without matching earnings growth or sector optimism.

Full Exit If

ROE drops below 25%

EPS stagnates for 2+ quarters

FII sell-off intensifies and dividend payout declines

Regulatory pressure emerges or tech disruption hits margins

IRCTC is less about explosive growth and more about consistent cash flows with low risk. Like buying a toll booth on a national highway — predictable, stable, and favored by institutional investors in India’s rising consumption landscape.

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