Broker’s call: IRCTC (Buy)

Indian Railway Catering and Tourism Corporation Ltd (IRCTC) is set to benefit from its dominant position in online railway ticketing and its expansion into a broader mobility platform. The company's e-ticketing penetration has reached 89% of reserved bookings in FY26, demonstrating strong digital adoption among users. With a large user base, IRCTC has multiple avenues for generating revenue through convenience fees, payments, advertising, and cross-selling of travel services.

The rising premiumisation of passenger travel, driven by an increasing AC mix (currently at 51%) and the adoption of Vande Bharat trains, further bolsters IRCTC's revenue potential through higher convenience fee realisation. Furthermore, the company's proposed unified travel platform, which aims to integrate rail, air, hotel, bus, and tourism services into a single ecosystem, is expected to enhance customer engagement and retention, thereby driving margin expansion in the medium-term.

IRCTC has been given a valuation of 25 times the average EPS of FY28E and FY29E, with a 'Buy' recommendation in place and a target price of ₹560. There are two key options that could further boost the stock's value: the successful launch of the unified travel portal and the final approval of the payment aggregator license. However, there are also several key risks to consider, including government regulations, deepening UPI penetration, execution risks in new initiatives, and constraints related to Rail Neer capacity and operational risks.