IRCTC shares: Railway stock gets 'Buy' rating from PL; here's target price
IRCTC shares: Prabhudas Lilladher remains optimistic about IRCTC's prospects, expecting a sales and PAT CAGR of 11 per cent over the next two years.
- May 30, 2025,
- Updated May 30, 2025 12:11 PM IST
Indian Railway Catering and Tourism Corporation (IRCTC) reported a subdued performance in the fourth quarter of fiscal year 2025, with its EBITDA margin dropping to a multi-quarter low of 30.4 per cent, below the anticipated 32.6 per cent. This decline was primarily driven by stagnant catering revenue and increased employee and other expenses. Despite these challenges, an exceptional gain of Rs 45.70 crore provided some relief to the company's profit after tax (PAT). Brokerage Prabhudas Lilladher has maintained a 'Buy' rating on the stock, setting a target price of Rs864.
Catering revenue for IRCTC remained unchanged in Q4FY25, contributing significantly to the weaker financial results. Prabhudas Lilladher projects a 13 per cent compound annual growth rate (CAGR) in the catering division over the next two years, driven by rising e-catering volumes, potential growth in non-railway catering, and the introduction of Vande Bharat trains. Despite the current challenges, the future outlook for the catering sector appears positive.
Internet ticketing, a strong performer for IRCTC, saw an 8.8 per cent year-on-year increase in revenue, reaching Rs 372.5 crore, with an EBIT margin of 82.4 per cent. This segment continues to be a key revenue driver for the company, bolstered by the non-convenience pie which is expected to augment top-line growth.
The Rail Neer segment also demonstrated growth, with revenue increasing by 15.7 per cent year-on-year to Rs96 crore and an EBIT margin of 12.2 per cent. The addition of three new plants is anticipated to further support this division's expansion, providing a growth kicker for IRCTC.
Tourism revenue was a standout performer, surging 38.2 per cent year-on-year to Rs 274.40 crore, with an EBIT margin of 18.1 per cent. This significant growth underscores the increasing demand for tourism services, positioning IRCTC to capitalise on the sector's potential.
Overall, IRCTC's Q4FY25 revenue increased by 10.1 per cent year-on-year to Rs 1,268.5 crore. EBITDA rose by 6.4 per cent year-on-year to Rs 385.50 crore, although it fell short of the projected Rs430 crore. The adjusted PAT increased by 13.1 per cent year-on-year to Rs 312.60 crore, aided by the exceptional gain.
Prabhudas Lilladher remains optimistic about IRCTC's prospects, expecting a sales and PAT CAGR of 11 per cent over the next two years. The brokerage's confidence is rooted in the potential growth opportunities across IRCTC's various divisions, despite recent financial setbacks.
Indian Railway Catering and Tourism Corporation (IRCTC) reported a subdued performance in the fourth quarter of fiscal year 2025, with its EBITDA margin dropping to a multi-quarter low of 30.4 per cent, below the anticipated 32.6 per cent. This decline was primarily driven by stagnant catering revenue and increased employee and other expenses. Despite these challenges, an exceptional gain of Rs 45.70 crore provided some relief to the company's profit after tax (PAT). Brokerage Prabhudas Lilladher has maintained a 'Buy' rating on the stock, setting a target price of Rs864.
Catering revenue for IRCTC remained unchanged in Q4FY25, contributing significantly to the weaker financial results. Prabhudas Lilladher projects a 13 per cent compound annual growth rate (CAGR) in the catering division over the next two years, driven by rising e-catering volumes, potential growth in non-railway catering, and the introduction of Vande Bharat trains. Despite the current challenges, the future outlook for the catering sector appears positive.
Internet ticketing, a strong performer for IRCTC, saw an 8.8 per cent year-on-year increase in revenue, reaching Rs 372.5 crore, with an EBIT margin of 82.4 per cent. This segment continues to be a key revenue driver for the company, bolstered by the non-convenience pie which is expected to augment top-line growth.
The Rail Neer segment also demonstrated growth, with revenue increasing by 15.7 per cent year-on-year to Rs96 crore and an EBIT margin of 12.2 per cent. The addition of three new plants is anticipated to further support this division's expansion, providing a growth kicker for IRCTC.
Tourism revenue was a standout performer, surging 38.2 per cent year-on-year to Rs 274.40 crore, with an EBIT margin of 18.1 per cent. This significant growth underscores the increasing demand for tourism services, positioning IRCTC to capitalise on the sector's potential.
Overall, IRCTC's Q4FY25 revenue increased by 10.1 per cent year-on-year to Rs 1,268.5 crore. EBITDA rose by 6.4 per cent year-on-year to Rs 385.50 crore, although it fell short of the projected Rs430 crore. The adjusted PAT increased by 13.1 per cent year-on-year to Rs 312.60 crore, aided by the exceptional gain.
Prabhudas Lilladher remains optimistic about IRCTC's prospects, expecting a sales and PAT CAGR of 11 per cent over the next two years. The brokerage's confidence is rooted in the potential growth opportunities across IRCTC's various divisions, despite recent financial setbacks.