Reduce Indian Railway Catering and Tourism Corporation; target of Rs 822: 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

While Indian Railway Catering & Tourism Corporation’s (IRCTC IN) top-line was broadly in-line with our estimates, operational performance was weak with EBITDA margin of 33.5% (PLe 35.3%). We believe growth in internet ticketing division has plateaued with e-booking penetration at ~83% and expectation of a mid-single digit growth in volumes over FY24-FY26E. In addition, rising share of low yielding UPI transactions (45% share in 1QFY25) will limit the scope for margin expansion. While we have re-aligned our topline estimates amid strong performance in catering division, our EPS estimates remain broadly intact given the segment commands lower margin. During FY24, catering/internet ticketing division contributed 45%/30% to IRCTC’s top-line and 20%/77% to its EBIT.

Outlook

We believe scope for earnings surprise is limited given growth in high margin internet ticketing division has plateaued. We expect sales/PAT CAGR of 11%/12% over FY24-FY26E and retain ‘REDUCE’ with a TP of Rs822 (earlier Rs811) after assigning a multiple of 47.5x (no change) over FY26E EPS.

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Indian Railway Catering and Tourism - 190824 - prabhu