Read the recent earnings call transcript, will be interesting to see if they can actually execute their non-railway ambitions of becoming catering / hospitality giants.
Sidenote: Was just a little amused with the fact that the MD / CFO were not that great with numbers and didn’t have a basic PPT with them during the investor call for reference. These are the small things that give you an insight into how sharp / quick the management is. But, that’s just my reading of it.
Would like to see how much revenue / EBITDA can be generated from various new initiatives like:
- e-Catering partnerships with Zomato / Devyani International
- Online helicopter bookings
- Monetization of Chatbots
- Setting up iPay (it’s own payment platform)
The biggest risk I believe, is that it is a GOVERNMENT created monopoly. Government has tried to privatize this sector before with little success. This could happen again, and is IRCTC in a position to compete? Can it compete with the likes of MMT/EasyTrip if online railway bookings open to the private sector? That, is the biggest risk.
At the current valuation, I’d be a little cautious of getting into the stock. Margin of safety looks low.
I’ve written a DETAILED article here covering all of this in greater detail - IRCTC : a play on Indian Railways - by Siddharth Bothra
Disclosure: Invested a few years back, and contemplating offloading majority of my position.
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