Hold Indian Railway Catering and Tourism Corporation; target of Rs 694: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Indian Railway Catering and Tourism Corporation

We upgrade our FY23E/FY24E/FY25E EPS estimates by 2%/6%/7% respectively as 1) we increase our ticketing volume estimates which have shown resilience despite 2S reversal amid rising online penetration and 2) continued traction in non-convenience revenue. Indian Railway Catering & Tourism Corporation’s (IRCTC IN) results were broadly in-line with revenues of Rs9,181mn (PLe Rs8,791mn) and EBITDA margin of 35.5% (PLe 36.2%). Given majority of the benefits of catering price hike & rail neer expansion will be reflected in FY23E, we foresee growth challenges ahead and expect sales/PAT CAGR of 9%/11% over FY23E-FY25E. IRCTC trades at 51x/45x our FY24E/FY25E EPS estimates and we believe current valuations are pricey in absence of meaningful growth levers.

Outlook

Consequently, we maintain our HOLD rating on the stock with a DCF based TP of Rs694. At our TP, stock is implicitly valued at 47x Sep-FY24EPS of Rs14.9.

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Indian Railway Catering and Tourism - 14 -02 - 2023 - prabhu