NEW DELHI (Metro Rail & Steel): Indian Railway Catering and Tourism Corporation (IRCTC) shares surged by 2.65% during Tuesday’s trading session, reaching ₹719.90 apiece, following the Ministry of Railways’ (Railway Board) endorsement for the company to engage in long-term tenders spanning 7 years. The approved tender model involves an initial 5-year term, with potential extensions for an additional 2 years based on performance, focusing on train clustering.
However, IRCTC disclosed in a regulatory filing on Monday that it has been advised by the Ministry of Railways to refrain from proceeding with the initially proposed long-term tenders (5+5 years) for onboard catering services. The guidance aims to ensure a smoother implementation of the Yearly Service Agreement (YSA) policy for enhanced passenger services on trains.
IRCTC stands as the sole entity authorized by the Indian government to provide online railway tickets, onboard catering services, and packaged drinking water at railway stations and onboard trains across India. Its services have expanded to encompass a broad spectrum of tourism and hospitality offerings, including luxury train tours, hotel bookings, and holiday packages.
The stock made a robust market debut on October 14, 2019, with a premium listing of 127.7% at ₹728.6 per share, significantly higher than its IPO price of ₹320. Since October 29, 2021, the stock has been trading on an ex-split basis following a 1:5 ratio. Over the last six months, IRCTC shares have yielded a 16% return. Its long-term performance reflects a remarkable growth trajectory, showcasing a remarkable 156% return in the last three years and an astounding surge of 1006% over the last five years.
In Q2FY24, the company reported a 30% improvement in standalone net profit, amounting to ₹294 crore. The revenue from operations in the second quarter of the fiscal stood at ₹995.3 crore, registering a robust growth of 23.5% year-on-year (YoY). The catering segment revenue witnessed a significant uptick of 29%, reaching ₹431.5 crore in the September quarter, while revenue from the internet ticketing segment surged by 9% to ₹327 crore.
As of Q2FY24, the Indian government retains 62.4% ownership in the company, with foreign portfolio investors and domestic institutional investors holding 7.1% and 10.5%, respectively. Regular shareholders account for 20% ownership, as per Trendlyne data. At 01:00 PM, IRCTC stock exhibited a 1.04% gain, trading at ₹708.65 per share, highlighting continued market interest amidst regulatory complexities impacting its tendering strategies.
