Indian Railway Catering & Tourism Corp Ltd ,well known as IRCTC is a Central Public Sector Enterprise (CPSE) under Ministry of Railways, Government of India. It is “Mini Ratna (Category-I)” CPSE and was incorporated on 27 th September, 1999. E-ticketing and catering services account for almost 80 percent of IRCTC profit.Company enjoys monopoly in its business in India.
What are the core business activities of IRCTC?
- Catering & Hospitality
- Online Ticketing
- Travel &Tourism
- Packaged Drinking Water sold as Rail Neer
Highlights of business activities:
- It is the only company providing hospitality services in more than 460 passenger trains on board .
- IRCTC also manages Refreshment rooms, Jan Ahaars and Cell Kitchens on railway platforms and is engaged in providing quality food at affordable rates.
- To attract high income group customers, it has opened 8 Executive Lounges in the railway stations at Visakhapatnam, New Delhi, Vijayawada, Agra Cantonment, Jaipur, Ahmedabad, Madurai and Sealdah .
- It’s e-ticketing service account for 70% of reserved tickets booked online in 2018-19 on Indian Railways and contribute most to operating profit of the company.
- Cumulative production capacity is 11,64,000 bottles per day from 11 Rail Neer plants.
IRCTC reported profit of 270.42 crores rupees before tax in dec 2019 quarter, growth of 240% in comparison to Dec 2018 quarter. In 2018 ,dec quarter company had reported 112.42 crores profit before tax.
E ticketing and catering services account for almost 80 percent of IRCTC profit. It got listed on 14 oct on bourses at huge premium to IPO price of 315 to 320 rupees per equity share. Stock got consolidated in trading range of 880 to 1020 between nov to Jan end. After upward breakout from the consolidation range ,IRCTC climbed to hit high of 1995.00 on strong profit earning.
In current bear market scenario,IRCTC also have witnessed significant correction. On Friday, it closed the day at 898.95 with gain of 42.80 points (5.00%).Stock is currently trading below its 26 days EMA and according to RSI (28.95) is oversold.
In support to 21 lockdown announced by Indian government , Indian railways have stopped operating passenger trains which expected to have negative impact on IRCTC’s revenue and profit.However, Indian Railways is running its freight train 24/7 to ensure the supply of essential commodities like food grain, milk, fruits & vegetables, sugar, edible oil, petroleum products and coal across the country.
IRCTC’s twitter handle is engaged in increasing the awareness level of Corona virus through it’s large follower base.IRCTC have 226.1K followers on microblogging site,Twitter.
Use internet, mobiles to reach out & stay connected & help to spread awareness about Corona Virus.
Long term investors should start accumulating IRCTC at current levels and should add more in case of further fall. Once market condition improves , it is likely going to outperform the market due to the monopoly it enjoys in its business.