Covid-19 impact: IRCTC's investors should brace for lower returns

Resumption of passenger trains key challenge

The stock of Indian Railway Catering and Tourism Corporation (IRCTC) has seen a sharp recovery of 67 per cent from its March lows, significantly higher than the 39 per cent rise in the Sensex. Though IRCTC’s strong long-term growth potential, led by its monopolistic position in Indian railway services partly justifies the Street’s action, investors should brace for lower returns in the near term, in light of poor top-line visibility.

IRCTC is the only company authorised by the Railways to provide catering services, e-ticketing services, and packaged drinking water at railway stations and trains.

Uncertainty over resumption of passenger trains and the