Hold IRCTC target of Rs 833 Prabhudas Lilladher

Prabhudas Lilladher's research report on  IRCTC

IRCTC’s performance was broadly in-line with our estimate with EBITDA margin of 35.0% (PLe 35.3%). However, performance of catering division was sub-par due to a) closure of certain own kitchens and b) train cancellations amid heavy monsoons. We expect sales/PAT CAGR 8.4%/7.5% over FY25E-FY27E driven by Catering & Rail Neer divisions as growth in high margin ticketing segment as plateaued. IRCTC trades 47x/44x our FY26E/FY27E EPS estimates and we believe current valuations leave limited headroom for re-rating given mid-to-high single digit earnings growth over FY25E-FY27E. We broadly maintain our estimates and upgrade to “HOLD” with a TP of Rs833 after assigning a multiple of 47.5x (no change) over FY26E EPS.

Outlook

We upgrade IRCTC to “HOLD” (earlier “REDUCE”) with a TP of Rs833 given 19% correction in stock price over the last 6 months.