IRCTC and IRFC Attain ‘Navratna’ Status, Strengthening Railway PSUs

On Monday, the government conferred ‘Navratna’ status upon two Railway public sector enterprises (PSUs) – Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC).

With this announcement, IRCTC has become the 25th Navratna among the Central Public Sector Enterprises (CPSEs), while IRFC has secured the 26th position in the list.

IRCTC, which operates under the Ministry of Railways, recorded an annual turnover of Rs 4,270.18 crore and a net worth of Rs 3,229.97 crore for the financial year 2023-24.

The company reported a 13.7% increase in consolidated net profit to Rs 341 crore for the quarter ending December 31, 2024, compared to Rs 300 crore in the same period the previous year. This growth was attributed to higher income.

Financial Performance and Market Reaction

IRCTC’s total revenue from operations saw a 10% rise, reaching Rs 1,224.7 crore in the reviewed quarter, up from Rs 1,115.5 crore a year earlier.

In February, the company disclosed this data in an exchange filing. Additionally, the board declared a second interim dividend of Rs 3 per share for shareholders, with February 20, 2025, set as the record date for payment.

On the National Stock Exchange (NSE), IRCTC shares closed at Rs 677.8, reflecting a 1% increase.

Meanwhile, IRFC shares ended flat at Rs 111.6 apiece. The following day, February 4, 2025, shares of both IRCTC and IRFC saw gains after the government’s announcement regarding their elevation to Navratna status.

IRFC shares opened at Rs 111.35, slightly up from the previous close of Rs 111.15 on the Bombay Stock Exchange (BSE).

The stock then climbed to an intraday high of Rs 115.40 before settling at Rs 113.85, marking a 2.43% increase.

However, it remained close to its 52-week low of Rs 108.05, while its 52-week high stood at Rs 229.05. The company’s market capitalization reached Rs 1,48,654 crore.

IRCTC shares, which opened at Rs 679.95, initially gained 0.57% but later declined due to selling pressure, touching a low of Rs 662.30 before closing at Rs 671.90.

Railway PSUs Achieve Navratna Status

Following this elevation, all seven listed railway PSUs have now attained Navratna status. The Railway Ministry highlighted that out of the 12 CPSEs under its purview, seven are publicly listed.

According to the ministry, “All Railway CPSEs are profit-making entities. Their cumulative profit increased from Rs 7,015 crore in FY 2020-21 to Rs 11,780 crore in FY 2023-24, marking a 68% rise over three financial years.”

CONCOR was the first CPSE to be designated a Navratna in July 2014. Under the tenure of the current Railway Minister Ashwini Vaishnaw, six additional CPSEs – RVNL, IRCON, RITES, RailTel, IRCTC, and IRFC – have achieved this status.

RVNL was upgraded in May 2023, followed by IRCON and RITES in October 2023, and RailTel in August 2024.

Criteria for Navratna Status

The central government grants Navratna status to CPSEs that meet specific criteria. Companies classified as Miniratna I and Schedule ‘A’ must have received an ‘excellent’ or ‘very good’ MOU rating for at least three out of the last five years.

They must also achieve a composite score of at least 60 based on six key performance indicators, including net profit to net worth, manpower cost to total production cost, cost of services, PBDIT to capital employed, PBIT to turnover, and earnings per share.

With IRCTC and IRFC joining the Navratna ranks, all seven listed Indian Railway companies now hold this prestigious designation.

Stock Market Trends

Railway stocks surged on February 4, 2025, following the announcement. RVNL shares rose by 4.85% to Rs 339.25, pushing the company’s market capitalization close to Rs 71,000 crore.

IRCON International Ltd gained 4.09%, closing at Rs 146.25, with a market value near Rs 14,000 crore.

IDBI Capital issued a ‘sell’ rating on IRCON International with a target price of Rs 143, citing a muted Q3 performance.

Antique Stock Broking maintained a ‘hold’ rating with a target of Rs 152 but assigned a ‘sell’ rating for RVNL with a target of Rs 215.

IRFC shares climbed 3.69%, closing at Rs 115.25, with a valuation exceeding Rs 1.5 lakh crore.

RailTel Corporation saw a 3.08% increase, reaching Rs 285.75, while RITES Ltd rose 2.65% to Rs 203.70. IRCTC and Container Corporation of India Ltd (Concor) both recorded a 1% increase in early trading.

IDBI Capital recommended a ‘buy’ rating on IRCTC, setting a target price of Rs 870 due to strong December 2024 quarter performance.

Prabhudas Lilladher rated it a ‘hold’ with a target of Rs 809, while Antique assigned a ‘hold’ rating on RITES at Rs 243 per share.

Impact of Navratna Status

Concor is focusing on the Varnama terminal to drive growth from Q4FY25. However, InCred Equities noted that increased rail freight costs impacted its EBITDA margin, assigning an ‘add’ rating with a Rs 1,133 target price.

Elara Capital downgraded Concor from ‘buy’ to ‘accumulate,’ lowering the target price to Rs 839 due to macroeconomic challenges.

The Department of Public Enterprises (DPE) confirmed the grant of Navratna status to IRCTC and IRFC in a social media post. As a result, India now has 26 Navratna companies.

Navratna status provides greater financial autonomy, allowing companies to invest up to Rs 1,000 crore without prior central government approval.

Prominent Navratna companies include Bharat Electronics Ltd, Engineers India Ltd, Hindustan Aeronautics Ltd, National Aluminium Company Ltd, Rail Vikas Nigam Ltd, IRCON, RITES, and others.