Indian Railway Catering And Tourism Corporation Limited Valuation
IRCTC · Consumer Services · Current price ₹468.05
Is Indian Railway Catering And Tourism Corporation Limited undervalued?
We estimate the fair value of Indian Railway Catering And Tourism Corporation Limited at ₹760 per share, against a market price of ₹463. That puts the share price about +64.2% below our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 3 methods: Discounted cash flow (2-stage) (₹274), Fair multiple (P/E) (₹1,172), Residual income (excess return on book) (₹423). These methods disagree materially, so the estimate is their midpoint rather than a weighted blend, and the disagreement is part of the finding. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Indian Railway Catering And Tourism Corporation Limited spans ₹380 to ₹836. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Valuation multiples
Indian Railway Catering And Tourism Corporation Limited trades at a P/E of 26.9x and a P/B of 8.4x, with a dividend yield of 1.9%. Multiples are most useful compared against the company's own history and its sector peers — see the peer comparison for context.
How we got this fair value
Every number below is part of the same estimate for Indian Railway Catering And Tourism Corporation Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹380 – ₹836
Why this method for this business
IRCTC is an asset-light compounder with durable moat and earnings power, making DCF and relative PE suitable. Residual income complements these models by capturing book value and return on equity.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
downweighted: 177% from committee consensus (₹423)
Book value plus the present value of returns earned above the 10.6% cost of equity
- Discounted cash flow (2-stage) is primary for asset-light compounders like IRCTC, but the deterministic baseline already uses it. Other models like EV/EBITDA are not relevant for a consumer services business with strong brand and recurring revenue.
What was missing
- Lack of analyst coverage for forward estimates
- Limited data on potential merger synergies
What drives it
33 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 744 ₹cr
- Net debt
- 81 ₹cr
- Sector-median P/E
- 15.15×
- Peers used
- 3
- EPS (TTM)
- 17.4 ₹/share
- Own-history median P/E
- 44.03×
- ROE (normalized)
- 38.9%
- Book value / share
- 45.8 ₹
fcf_norm (median ≤5y positive)
gross debt (cash n/a)
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
computed
reported
- Discount rate (r)
- 14.4%
- Beta
- 1
- Cost of equity
- 10.6%
COE (building-block)
bottom-up industry
building-block
- Stage-1 start growth
- 30%
- Fade shape
- hard
- Terminal growth (g)
- 5.5%
- Stage-1 years
- 14 y
pat_cagr_5y
lifecycle Hyper-Growth
macro terminal × quality premium
lifecycle Hyper-Growth horizon
- Lifecycle stage
- Hyper-Growth
- Quality premium
- 1.1×
- Anchor correction
- peer anchor 15.1x diverges 2.9x from 7yr own-history 44.0x (no size-comparable peer) — anchor blended 0.6 toward own-history → 32.5x
- Term: quality
- +14.3%
- Term: growth
- +40.0%
- Term: capital_allocation
- +5.9%
- Term: financial_strength
- +9.3%
- Term: history
- +10.7%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
- Moat
- Wide
- Excess-return horizon
- 20 yrs
forecast engine (L20)
moat Wide + capital allocation
peer-anchor mismatch — deep own-history used instead
quality 84/100 (high, stable returns) → premium
durable ~48% CAGR (ROCE 51% > hurdle) → premium
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: effectively debt-free → premium
history: market paid +36% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
computed
computed
- Path
- FCFE
- Terminal-value fraction
- 0.399
- Premium vs sector
- +107.4%
- Fair-multiple confidence
- 79%
- Fair P/E
- 67.35×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Indian Railway Catering And Tourism Corporation Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyUnderstand the ratios
More on Indian Railway Catering And Tourism Corporation Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.