IRCTC share price: Following the release of the company’s Q4 earnings after market hours on Tuesday, the share price of Indian Railway Catering and Tourism Corporation Ltd (IRCTC) fell by more than 5% in morning transactions.
In early trading on the NSE, the price of IRCTC shares fell to lows of ₹1,027.15, a decrease of more than 5% from the previous close of ₹1,083.10.
IRCTC’s declared net profit of ₹284 crore up 2% year over year from ₹279 crore during the same period the previous year.
Net profit is below projections
However, an unusual charge of Rs7.9 crore related to excess provisions written back for prior years relating to various expenses also had an influence on the reported net profit.
The net profit, according to analyst estimations by Prabhudas Lilladher, was Rs276.3 crore after accounting for the aforementioned and all other one-time expenses. While rising 9.2% annually, this fell short of the ₹306.6 crore analysts’ expectation from Prabhudas Lilladher. According to them, the profit margins were 23.9%, which was below the projections of 27.1%, 26.2%, and 28.1% in the corresponding quarters of 4QFY23 and 3QFY24.
A rise of 11.6% was seen in the railway PSU’s earnings before interest, taxes, depreciation, and amortization (EBITDA) during the same period last year, from ₹324.6 crore to ₹362.4 crore. Still, the margin fell from 33.6% to 31.4% during the same time previous year.
The EBITDA margins were also less than anticipated; according to Prabhudas Lilladher analysts, they had anticipated an EBITDA margin of 34.2%. According to experts, higher than anticipated other expenses were the main cause of the margin miss.
Growth in revenue is driven by catering and online ticketing.
IRCTC, the Indian Railways’ e-ticketing and catering company, reported a 19% growth in operational revenue to ₹1,155 crore in the March quarter, compared to ₹965 crore during the same period previous year.
IRCTC’s primary businesses of catering and online ticketing are driving revenue growth. Smaller industries like rail network and tourism are also contributing, albeit at a lesser rate.
Revenues from rail catering increased by 34.1% YoY to ₹530 crore, while revenues from online ticketing increased by 16% to ₹342 crore. Revenues from tourism increased 11.6% year over year to Rs154. 7, while revenue from Rail Neer increased 13.1% YoY to ₹83 crore. Revenues from Rail Teerth, however, decreased. On the plus side, though, earnings before interest tax (Ebit) is positive for every segment.
Payout
A final dividend of ₹4 per share, or 200 percent of the paid-up share capital, with a face value of Rs. 2, has been authorized by the IRCTC board for FY24. This is on top of the interim dividend that the business declared in November 2023 of Rs. 2.50 per share, or 125% of the paid-up share capital.
Estimates( dividend)
At present, the stock is trading at 66.1 times the analysts’ FY25 earnings projection by Prabhudas Lilladher. With a target price of Rs. 825 per share, they currently have a HOLD rating on the stock. On Thursday, they will reassess the same after the analysts’ conference call.
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