IRCTC conference call highlights, share price target & more

Indian Railway Catering and Tourism Corporation Ltd (IRCTC), which reported a 33 per cent year-on-year (YoY) rise in its net profit for the June quarter said it is focusing on serving Mail Express trains running for more than 12 hours, as these are the primary target group for Catering services. IRCTC believes the introduction of more premium trains will drive its revenue growth and improve margins in the Catering segment, Arihant Capital Markets said.

For the June quarter, the Catering and Rail Neer segments were the main contributors to the profit, with increases of 68 per cent in Catering and 27 per cent in Rail Neer on a sequential basis. The Catering segment revenue rose to Rs 559 crore, up 5.3 per cent QoQ and 17.1 per cent YoY, with the Ebitda margin improving to 13.94 per cent. The Tourism segment saw a 38.1 per cent QoQ and 12.4 per cent YoY revenue degrowth, thanks to the non-operational status of certain trains due to the general parliamentary elections.

IRCTC guidance 
IRCTC guided for 17 per cent revenue growth in five years. It sees net profit growing at 10 per cent during the same period, Arihant Capital Markets said.

Despite nearing saturation with 84 per cent of tickets being booked online, IRCTC expects continued revenue growth in Internet Ticketing. Revenue from Vande Bharat trains contributed roughly 12 per cent to the Catering segment, with margins expected to improve as more premium trains are introduced, Arihant Capital Markets said.

IRCTC capacity expansion
In the case of Rail Neer, IRCTC has been increasing the capacity by adding 3 more plants: one in Vijayawada, and 2 more plants are yet to be decided. At present, the railway PSU is selling 17.8 crore bottles per day against 12.5 crore in Q1FY24. IRCTC continued selling bottles at the same price range of Rs 15 per bottle. For the June quarter Rail Neer's absolute Ebitda grew 27.4 per cent QoQ and 11.9 per cent YoY, reflecting the company's efforts to enhance profitability, Arihant Capital Markets said.

IRCTC share price target
IRCTC shares are trading at 56.6 times FY25 EPS estimates. Prabhudas Lilladher has a 'Reduce' rating on the stock with a target price of Rs 811. The brokerage said IRCTC's Ebitda miss its estimates due to higher catering and other expenses. It will be coming up with a detailed report soon. 

IRCTC Q1 results 

IRCTC reported a 32.5% rise in net profit for the quarter ended June 2024. IRCTC reported a net profit of Rs 308 crore in the June quarter against a profit of Rs 232 crore in the June 2023 quarter. Revenue for the last quarter climbed 11.8 per cent to Rs 1,120 crore from Rs 1,002 crore in the year-ago quarter.  Ebitda rose 9.3 per cent to Rs 375 crore in the June 2024 quarter against Rs 343 crore in the Q1 of the previous fiscal. Ebitda margins slipped to 33.5 per cent in the last quarter against 34.2 per cent on a year-on-year basis.