IRCTC shares down 40% from its 52-week high; can Navratna status boost the railway PSU?

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) rose nearly 1% in opening trade on Wednesday, in sync with positive broader market, as sentiment was lifted after the state-owned company granted ‘Navratna’ status by the Government of India. As a Navratna central public sector enterprises (CPSEs), IRCTC can now make financial decisions with greater autonomy, and operate internationally without many bureaucratic hurdles.

Early today, IRCTC share price opened a tad lower at ₹673.75 after ending 0.3% lower at ₹674.05 in the previous session. Paring opening losses, the largecap railway stock gained nearly 1% from the day’s low to hit a high of ₹680.25, while the market capitalisation climbed to ₹54,368 crore.

At the current level, IRCTC shares are down 40% from its 52-week high of ₹1,148.30 touched on May 22, 2024, while it recovered 3.5% from its 52-week low of ₹655.70 hit on March 3, 2025. The railway PSU has seen sharp correction in the past one year, with the stock falling 28% in 12 months; 27% in six months; and over 13% year-to-date (YTD). The counter lost nearly 14% in a month amid broad based selling across the market.

For the third quarter ended December 31, 2024, IRCTC reported a 14% rise in its standalone net profit at ₹341 crore as compared to ₹300 crore in the same period last year. The company's revenue from operations for Q3 FY25 stood at ₹1,225 crore, up 10% from ₹1,115 crore in the same quarter of the previous financial year. On a sequential basis, profit grew 11% from ₹308 crore in the July-September quarter of FY25, while revenue jumped 15% quarter-on-quarter to ₹1,064 crore in Q2 FY25. The state-owned firm also declared a second interim dividend of ₹3 per equity share for the financial year 2024-25.

Can Navratna status boost IRCTC shares?

On March 3, the central government granted the ‘Navratna’ status to railway companies Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC). With these two new entrants, seven listed railway PSU companies have been given 'Navratna' status. Of the 12 railway CPSEs, Concor, RVNL, IRCON, RITES and RailTel were elevated earlier.

The Navratna status gives companies greater autonomy, allowing them to invest up to ₹1,000 crore or 15% of their net worth in a single project without government approval, and up to 30% of their net worth annually, provided it does not exceed ₹1,000 crore. They can also establish overseas subsidiaries, form joint ventures, and engage in mergers and acquisitions to enhance their market position and operational efficiency.

Public sector undertakings (PSUs) in India are classified into Maharatna, Navratna, and Miniratna categories based on financial performance and market standing. Navratna status, introduced by the government in 1997, is awarded to Miniratna Category I companies in recognition of their strong financial and market performance.

Now there are 26 Navratna companies in India, including recent upgrades like SECI, NHPC, SJVN, and RailTel. To be eligible for Navratna status, a Miniratna-I company must have an "Excellent" or "Very Good" MoU rating in three out of the last five years and achieve a composite score of 60 or more across various performance indicators such as net profit, net worth, and earnings per share. The last PSU that was upgraded to Navratna status was Mazagon Dock. There were 13 Maharatnas, 21 Navratnas (excluding the recent additions), 55 Miniratnas-I, 11 Miniratna-II central public sector enterprises.

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