IRCTC Shares Zoom 5% As Macquarie Backs Growth

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) saw a sharp rise on Friday, January 10, after global brokerage firm Macquarie initiated coverage with a positive outlook. The stock hit an intra-day high of Rs 800.75 on the National Stock Exchange (NSE), gaining nearly 5 per cent. It eventually closed at Rs 779.50, up 2.06 per cent.

IRCTC’s Strength

Macquarie emphasized IRCTC’s monopoly in Indian Railways’ e-ticketing and catering segments, with an 80 per cent share in the e-ticketing market. The brokerage praised the company for its strong financial performance, including a 30 per cent free cash flow margin and over 30 per cent returns on capital employed (ROCE) and invested capital (ROIC), achieved with minimal capital expenditure.

For the e-ticketing business, Macquarie expects IRCTC’s EBIT (Earnings Before Interest and Taxes) margin to remain high, ranging between 80 per cent and 85 per cent. Meanwhile, the catering segment’s margins are projected to be between 12 per cent and 15 per cent.