IRCTC Share Price Target at Rs 715: IDBI Capital
IRCTC has delivered a compelling Q3FY26 performance, reaffirming its structural growth trajectory anchored in India’s rail expansion. Revenue surged 18% year-on-year to Rs 1,449 crore, while PAT rose 15.5% to Rs 394 crore, reflecting strong execution across ticketing, catering, tourism and Rail Neer. The internet ticketing segment continues to dominate profitability with 85% EBITDA margins and 89% online booking penetration. With 260 Vande Bharat trains planned, Rail Neer capacity expansion underway, and non-convenience revenue streams accelerating, IRCTC is well positioned for sustained double-digit growth. IDBI Capital upgrades the stock to BUY with a target price of Rs 715.
Q3FY26: Revenue Momentum Meets Operational Discipline
Revenue Growth: IRCTC reported revenue of Rs 1,449 crore in Q3FY26, up 18.2% YoY. Sequentially, revenue grew 26.5%, underscoring demand momentum across segments.
Profitability: EBITDA rose 11.5% YoY to Rs 465 crore, with margins at 32.1%. PAT increased 15.5% YoY to Rs 394 crore, translating to an EPS of Rs 4.93 for the quarter.
Despite some margin moderation, operational leverage and diversified growth streams continue to underpin earnings visibility.
Internet Ticketing: The Crown Jewel
The internet ticketing business remains IRCTC’s structural moat.
Revenue: Rs 401 crore (+13.2% YoY).
EBITDA Margin: 85%.
Market Share: 89% of India’s reserved railway tickets are booked online via IRCTC.
Such dominance provides strong cash generation, minimal capital intensity, and unparalleled operating leverage. Rising UPI adoption—now above 50% of transactions—further enhances efficiency and potential fintech monetization.
Catering: Vande Bharat as a Growth Multiplier
Catering revenue rose 19.1% YoY to Rs 661 crore.
New Trains Added: 40 trains during the quarter, including 19 Vande Bharat trains.
Vande Bharat Impact: Approximate incremental billing of Rs 70 crore YoY.
While margins moderated slightly due to prepaid catering economics and GST burdens, management expects scale efficiencies to offset dilution over time. Crucially, 260 additional Vande Bharat train sets are planned, offering medium-term visibility through FY27–FY28.
Tourism: Premiumization Driving Acceleration
Tourism revenue climbed 29% YoY to Rs 289 crore.
Maharaja Express: +39% growth.
Bharat Gaurav & State Tirth: +51%.
Air Ticketing: +41%.
Tejas: Rs 50 crore revenue contribution.
EBITDA margins improved to 19% due to better mix and cost rationalization. The shift toward premium and religious tourism offerings reduces cyclical volatility and enhances margins.
Rail Neer: Capacity Expansion Unlocks Volume Upside
Rail Neer generated Rs 98 crore revenue, up 6.5% YoY.
Capacity Expansion: 25–30% increase over 18 months.
Plant Upgrades: Doubling capacity at Danapur and Ambarnath.
New Plants: Mysore, Prayagraj, Bhagalpur, Ranchi.
Given that IRCTC currently meets only 50–60% of demand seasonally, this expansion signals meaningful headroom for volume-led growth.
Financial Snapshot: Strength Across Metrics
Below is a consolidated financial overview:
| Year | FY24 | FY25 | FY26E | FY27E |
|---|---|---|---|---|
| Revenue (Rs mn) | 42,702 | 46,748 | 51,220 | 54,489 |
| EBITDA Margin (%) | 34.3 | 33.1 | 36.5 | 40.0 |
| Adj. PAT (Rs mn) | 11,696 | 12,667 | 14,146 | 16,441 |
| EPS (Rs) | 14.6 | 15.8 | 17.7 | 20.6 |
| PE (x) | 42.3 | 39.0 | 34.9 | 30.1 |
FY27E EPS: Rs 20.6
Target Multiple: 34.7x
Implied Target Price: Rs 715
Margins are projected to expand to 40% by FY27E, driven by ticketing mix and operating leverage.
Balance Sheet & Cash Flow: Fortress Fundamentals
IRCTC operates with zero debt and substantial cash reserves exceeding Rs 21,000 million.
ROE: 32–31% over FY26E–FY27E.
ROCE: Near 39%.
Dividend Yield: 1.4–1.5%.
Consistent operating cash flows and disciplined capital allocation reinforce long-term stability.
Strategic Catalysts Ahead
Unified Travel Portal: Cross-selling hotels, airlines, packages to 16 lakh daily ticket users.
Payment Aggregator License: RBI approval in process.
Non-Convenience Revenues: Advertising and loyalty income up 26%, reducing dependence on ticketing fees.
Railway Capex Cycle: Ongoing rail expansion structurally benefits IRCTC.
Risks to Monitor
Regulatory changes in convenience fees.
Catering margin moderation from prepaid train economics.
Dependence on Indian Railways policy framework.
However, IRCTC’s monopoly status and diversified monetization channels mitigate structural downside.
Valuation & Investment View
At Rs 618, IRCTC trades at 34.9x FY26E EPS and 30.1x FY27E EPS.
While premium valuations reflect monopoly economics and high ROCE, earnings visibility justifies the multiple compression risk. With EBITDA margins poised to expand and structural growth intact, IDBI Capital’s upgraded target of Rs 715 appears reasonable.
Investment Call: BUY
Target Price: Rs 715
Upside Potential: 16%
For long-term investors seeking exposure to India’s railway expansion and digital infrastructure growth, IRCTC remains a structurally advantaged compounder—albeit with intermittent volatility.
