IRCTC Q1 results: Net profit rises 33 % to Rs 308 crore, revenue up 11.8% to Rs 1,120 crore

IRCTC earnings

Indian Railway Catering and Tourism Corporation Ltd (IRCTC) has reported a net profit of Rs 308 crore for the June quarter of 2024-25, up 33.3 percent from the year-ago period on higher ticket sales.

Revenue came in at Rs 1,120.15 crore, rising 11.8 percent, the company that offers online tickets and manages food services on trains said in a regulatory filing on August 13. While the company passed analyst expectations for bottomline it narrowly missed topline expectations.

Prabhudas Lilladher had expected the company to report a net profit of Rs 306.5 crore while net Sales are expected to increase to Rs. 1,130.8 crore, according to Prabhudas Lilladher.

For the quarter ended March 31, 2024, the company reported consolidated sales of Rs 1154.8 crore and a net profit of Rs 284.18 crore.

The market capitalisation of IRCTC, as per the Bombay Stock Exchange, currently stands at Rs 73,340 crore. Shares of IRCTC on August 13 were trading 03 percent down at Rs 922.05 apiece on BSE. In the past three months, the stock has fallen around 8 percent.

The company's earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter was at Rs 428.55 crore growing by nearly 30 percent. EBITDA margin was at 38.3 percent as compared to 33 percent in the year-ago period.

The decline in margin was due to the higher contribution of other segments such as catering, state teertha and tourism, which are low-margin segments in comparison with internet ticketing.

The contribution of internet ticketing to overall revenue decreased to 28.5 percent from 29 percent last year.

IRCTC is the only entity authorised by the Indian government to provide online railway tickets, catering services to railways, and packaged drinking water at railway stations and trains in India.

The company has expanded its services over the years to include a wide range of tourism and hospitality offerings, such as luxury train tours, hotel bookings, and holiday packages.

The Indian government owns 62.4 percent of the shares in the company as of Q2FY24, while foreign portfolio investors and domestic institutional investors each own 7.1 percent and 10.5 percent, respectively. Regular shareholders own 20 percent.

Moneycontrol's Pro Research team noted that IRCTC’s valuation has run ahead of fundamentals despite the growth prospects for the railways and tourism and IRCTC’s unique monopoly position.

"We await a correction to turn constructive," it noted.

The Pro Research team also noted that IRCTC's financial performance will be modest with an 18.5 percent earnings CAGR between FY23-FY25e. While the top-line traction will be healthy, the declining share of high-margin internet ticketing is likely to suppress earnings.