Indian Railway Catering & Tourism Corporation Limited

“IRCTC is a structurally superior business — zero-debt, negative working capital, 81% EBIT margins on a mandated monopoly — but it is owned 62.4% by the Indian government, which has already demonstrated willingness to suspend the convenience fee that generates ~70% of profits. The business quality is exceptional; the governance is structurally misaligned with minority shareholders. At 25.7x forward earnings there is no margin of safety for this recurring policy risk. The right action is to track for a policy-driven de-rating to INR 400–430, where the risk/reward becomes compelling, and buy in tranches rather than aggressively — the government ownership structure means the discount can persist or widen before it narrows.”