Prabhudas Lilladher's research report on Indian Railway Catering and Tourism Corporation
IRCTC IN reported weak set of numbers with EBITDA miss of 7% led by weak performance from Catering and Rail Neer division. Catering revenue declined 2.2% YoY to Rs5,468mn as 1) base quarter had Rs320mn of business from election special trains and 2) license fee income from static units was low in 1QFY26 given quite a few stations were under upgradation. On the other hand, Rail Neer revenue was down 0.9% YoY to Rs1,105mn as Bilaspur plant was not operational. In addition, election special trains that were ferried in base quarter had a component of bottling business too which was missing this time around. In light of weak performance in 1QFY26, we cut our revenue estimates by ~4% over the next 2 years, however, our EPS estimates are broadly intact as we tweak our deprecation estimates given land forms ~Rs3,665mn of total cost pertaining to the new office building that has been capitalized.
Outlook
We expect revenue/PAT CAGR of 8%/10% over FY25-FY27E and retain BUY on the stock with a TP of Rs850 (44x FY27E EPS; no change in target multiple).
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