IRCTC Share Price Hits 52-Week High, Expanding Catering Services Beyond Railways

IRCTC, the service provider for Indian Railways, is set to diversify its business beyond railway operations. The company's shares surged by 3%, reaching a new 52-week high of ₹799.95 on December 14. This growth follows the announcement of IRCTC's ambitious plans to expand its non-railway catering business across the country.

Business Expansion Strategy

In a statement released on December 13, IRCTC expressed its commitment to proliferate in areas beyond railways, aiming to promote its brand and business nationwide. Currently managing catering services for various ministries, autonomous bodies, judiciary, and universities, the company has established hospitality outlets in nine organizations, including the Department of Telecommunications in New Delhi,  UP Secretariat in Lucknow and Calcutta High Court.

Strategic Partnerships

IRCTC has taken strategic steps by signing Memorandums of Understanding (MoUs) with various government bodies, including defense establishments like the Border Security Force, Indian Maritime University in Kolkata, and Cotton University, Guwahati. The company is actively commissioning 15 more catering units across the country in the near future.

IRCTC  Performance

IRCTC's stock, the sole firm authorized by Indian Railways for managing onboard train food services and online ticket booking, saw a rise, reaching ₹799.95 per share, surpassing its previous peak of ₹786.4. Despite a 44% rebound from its 52-week low in March 2023, the stock remains an underperformer. In the July-September quarter, the catering services arm reported a 30% increase in net profit to ₹295 crore compared to ₹226 crore a year ago. The revenue from operations rose by 23% to ₹995 crore against ₹806 crore in Q2 of FY24.

Investment Outlook

IRCTC shares present an opportunity for long-term investors. Analysts suggest that the stock, currently trading at ₹789.25, is expected to continue its uptrend and may reach ₹850 apiece levels after decisively breaching the ₹800 hurdle. Despite being an underperformer during recent rallies in Indian Railway shares, the company's diversification and numerous new train launches position it favorably for long-term success.

Final Words

As IRCTC continues its journey to become a premier brand in hospitality and catering, the company's strategic expansion plans, financial performance, and stock performance position it as a key player in India's growing railway and catering sectors.