Is IRCTC Still a Good Investment in 2025? A Deep Dive Into Its Business

The 2019 IRCTC IPO captured the imagination of investors across India. With a subscription level of 112 times, it was hailed as a rare opportunity—a near-monopoly play on Indian Railways. The listing was electric: the stock doubled on Day 1 and continued to climb in the weeks that followed. For many, it felt like a once-in-a-decade opportunity.

However, the journey post-IPO was far from smooth. Regulatory uncertainties, shifting government policies (like the convenience fee flip-flops), and the unprecedented disruption caused by the Covid-19 pandemic, which temporarily halted railway services, brought volatility to the stock. But if you zoom out and evaluate from a broader perspective, IRCTC has held its ground. From an adjusted IPO price of around ₹60 to its current level, the stock has delivered over 50% CAGR, making it a rare example of sustained performance despite high dependency on a single ecosystem.

Now, with investor excitement settling, the real story is not about hype—it’s about evolution. So, what has changed, and what does it mean for investors going forward?

• Is IRCTC Still a Good Investment in 2025? A Deep Dive Into Its Business

Understanding IRCTC’s Business Model: More Than Just Ticketing

Though often viewed as a ticket-booking platform, IRCTC operates across four key segments, each with distinct growth dynamics and margin profiles:

1. Internet Ticketing: The High-Margin Engine

• FY25 Revenue: ₹1,426 crore
  
• EBITDA Margin: ~82%
  
• Daily Transactions: ~14 lakh
  

Despite contributing just 31% to total revenue, this segment delivers over 75% of the company’s operating profits. The reason? Convenience fees. Every ticket booked through IRCTC generates a small fee. When scaled to over 50 crore tickets a year, this becomes a major cash generator. With minimal overheads and strong platform economics, this remains IRCTC’s crown jewel.

2. Catering Services: Volume-Driven, Margin-Constrained

• FY25 Revenue: ₹2,125 crore
  
• EBITDA Margin: ~13%
  

Catering is IRCTC’s largest revenue contributor but offers lower margins due to high operating costs. It includes on-board catering, station stalls, and base kitchens. The company is now focusing on e-catering—food delivered from external restaurants—to improve variety and margins. Over 2.5 crore e-catering meals were served in FY25, showing over 50% growth year-on-year.

3. Rail Neer: Water with a Competitive Advantage

• FY25 Revenue: ₹394 crore
  
• EBITDA Margin: ~12%
  
• Volume Sold: ~40 crore bottles
  

Rail Neer benefits from IRCTC’s exclusive access to railway platforms and trains. The company operates 20 bottling plants with plans to expand further. Though the unit economics are modest, the business is scalable due to its wide distribution network and growing passenger volumes.

4. Tourism & Travel: A Growing Strategic Pillar

• FY25 Revenue: ₹744 crore
  
• EBITDA Margin: ~13%
  

This segment includes domestic and international tour packages, Bharat Gaurav trains, and chartered services. Growth here is being fueled by institutional demand from state governments and PSUs, especially for religious and group tours. The Bharat Gaurav train initiative, in particular, has emerged as a key driver, given IRCTC’s expertise and access to railway infrastructure.

Segment-Wise Financial Snapshot (FY25 vs FY24)

Segment FY25 Revenue (₹ Cr) EBITDA Margin (%) FY24 Revenue (₹ Cr) EBITDA Margin (%) Growth Rate

Internet Ticketing	1,426	~82%	1,295	~82%	~10%
Catering	2,125	~13%	1,947	~13%	~9%
Rail Neer	394	~12%	340	~8%	~16%
Tourism & Travel	744	~13%	691	~3%	~8%
Total Revenue	4,674	-	4,260	-	~10%

What Lies Ahead for IRCTC: Clarity, Execution, and Core Expansion

IRCTC closed FY25 with:

• Revenue: ₹4,674 crore
  
• Net Profit: ₹1,314 crore (up ~19% YoY)
  
• EBITDA Margin: 33%
  
• Zero Long-Term Debt
  
• Cash Reserves: ~₹2,000 crore
  

The company has identified three clear areas for strategic growth:

1. Scaling Catering and Packaged Water

IRCTC is focusing on expanding its e-catering footprint across stations and routes while modernising kitchen infrastructure. Rail Neer continues to benefit from its supply chain edge and will expand to more Tier-2 and Tier-3 cities, driven by increased demand.

2. Tourism with Government Demand Support

IRCTC is strengthening its tourism business through institutional partnerships, ensuring volume stability. Bharat Gaurav trains, spiritual tourism, and PSU group travel packages are helping establish this segment as a scalable and reliable revenue stream.

3. Strengthening Existing Verticals, Not Chasing New Ones

Instead of pursuing aggressive diversification or monetisation, IRCTC is choosing to double down on its core strengths—ticketing, catering, packaged water, and curated tourism. This conservative yet focused strategy helps reduce risks while maintaining steady growth.

Valuation Check: Is IRCTC Still Worth It?

• Market Cap: ₹60,000 crore
  
• P/E Ratio: ~46x FY25 earnings
  

While the valuation appears steep, the market premium reflects IRCTC’s strong balance sheet, low risk, and dependable cash flows. Even with earnings growth stabilising at 15-20%, long-term investors may still benefit from dividends, capital protection, and lower volatility compared to more aggressive businesses.

The main risks remain regulatory uncertainty and execution delays in its scalable segments. But with its unique position as a semi-monopoly backed by Indian Railways, IRCTC remains one of the most defensible long-term bets in the public sector space.