Monopoly play

You can either look at IRCTC as a relic of the dotcom era or the Indian Railways’ e-commerce jewel. To its credit, IRCTC has not only made rail ticket bookings easier for the average traveller, but also forced touts to upgrade their technology quotient. In its heyday, the IRCTC network was a model
of robust technology backbone, but with increase in booking volume, getting through at peak hours is a pain. Still, in this age of e-commerce, IRCTC’s monopoly status ensures higher ‘engagement’.

A venture capitalist or a private equity firm would have given an arm and a leg to have a piece of the IRCTC pie in the early days. Not that its bottom line stinks now, but a few years ago, when you didn’t have too many promising start-ups, IRCTC could have commanded a significantly higher scarcity premium. Even today, given that high-cash burn start-ups with shaky business models are fancily valued, a debt-free IRCTC with its FY16 profit of #180 crore could easily get unicorn status.

An intermediary with no assets, IRCTC’s future growth from ticket sales will depend on an increase in train services, as the inventory of tickets the Railways would like to sell online is fixed. That’s clearly a reason for IRCTC to look for growth beyond ticket sales. The management is embarking on a whole bunch of initiatives, right from plush lounges to package tours. Whether these initiatives will catapult IRCTC into a higher orbit is the focus of this issue’s cover story.

 Among other stories, we have a feature on whether an independent Crompton Consumer can fly higher and catch investor fancy. With an ex-P&G CEO at the helm and its pure play status, analysts think the company should command a higher valuation going forward. To know what Crompton Consumer’s new-found ambition is about, read A Whiff of Fresh Air. Then, there is an interview with commodity permabull Jim Rogers, who has always preferred China over India as an investment destination.