IRCTC stock falls 5% post Q4 earnings, what should investors do?

Shares of IRCTC fell 5% in early deals today after the railway firm reported a marginal rise in Q4 net profit. IRCTC shares slipped 4.8% to Rs 1030.75 against the previous close of Rs 1082.70 on BSE. Revenue climbed 20% to Rs 1,154.8 crore. Topline and bottomline missed analysts’ expectations.

Jinesh Joshi, Research Analyst, Prabhudas Lilladher  said the firm saw a PAT miss and EBITDA miss due to higher other expenses. It has assigned a price target of Rs 825 with a hold rating on the stock.

“The stock currently trades at 66.1 times our FY25E EPS estimate. We currently have a HOLD rating on the stock with a price target of Rs 825,” said the brokerage.

Prabhudas Lilladher expected the company to report a net profit at Rs 306.5 crore, up 21.2 percent year-on-year (down 2.5 percent quarter-on-quarter).

The IRCTC board has declared a final dividend of Rs 4 per share for the financial year 2023-24. This is 200 percent of the paid-up share capital amounting to Rs 256 crore.

Earnings before interest, tax, depreciation and amortization (EBIDTA) in Q4 came at Rs 402.96 crore rising 3.4 percent. EBIDTA margin came at 34.89 percent as compared to 36.8 percent in the year ago period.

The contribution of internet ticketing to overall revenue decreased to 31 percent from 32.8 percent last year and 37.1 percent in FY23.

Gaurav Bissa, VP, InCred Equities said, "IRCTC has witnessed strong upside in the last few months, which was in line with the way many of the PSU stocks especially railway theme behaved. The stock made a swing high breakout, which pushed the price toward Rs 1,100 levels. However, negative divergence in RSI resulted in profit booking at higher levels and currently the prices are trading near a small rising trendline support of Rs 1,000. Investors are advised to hold the stock and fresh investment is advised on a close above Rs 1,135 which will trigger breakout in multiple patterns in point and figure charts with targets as high as Rs 1,500 levels."