IRCTC Share Price: Indian Railway Catering And Tourism Corporation Limited shares took a hit in early morning deals on Tuesday, November 15 as investors’ sentiment turned negative following the release of the second quarter business earnings. IRCTC which is a wholly-owned subsidiary of the Indian Railways under the Ministry of Railways on Monday released its Q2 results wherein it missed the Dalal Street expectations.
The company’s consolidated net profit jumped 42.54 per cent to Rs 226.03 crore on 98.99 per cent surge in revenue from operations to Rs 805.80 crore in Q2 FY23 over Q2 FY22.
The company’s revenue from the Catering business was at Rs 334.41 crore (up 368.36 per cent YoY), revenue from the Internet Ticketing business stood at Rs 300.26 crore (up 13.17 per cent YoY), revenue from the Rail Neer business was Rs 72.05 crore (up 75.01 per cent YoY) and revenue from the Tourism business was Rs 69.46 crore (up 156.69 per cent YoY) in Q2 FY23.
State Teertha segment reported revenue of Rs 29.63 crore during the period under review.
Profit before tax stood at Rs 307.46 crore in quarter ended 30 September 2022, registering a growth of 43.88 per cent from Rs 213.69 crore posted in the same period last year.
Total expenses soared 152.85 per cent year on year to Rs 524.33 crore in Q2 FY23. Cost of materials consumed zoomed 119.45 per cent to Rs 19.29 crore in Q2 FY23 from Rs 8.79 crore reported in Q2 FY22.
IRCTC, a Mini Ratna public sector enterprise under the administrative control of Ministry of Railways, is the sole entity authorized by Indian Railways (IR) to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India. The Government of India held 67.4 per cent stake in the company, as on 30 September 2022.
IRCTC stock has yielded a negative return of 16 per cent to its investors in the last one year. In perspective, the stock available at Rs 903.40 apiece on November 15, 2021, is now available at around Rs 760 a piece. The stock has a 52-week range from Rs 929 to Rs 557.
Currently, the company’s market cap is around Rs 60.70 trillion crore, according to the NSE website.
What Should Investors Do?
Jinesh Joshi – Research Analyst, Prabhudas Lilladher Pvt Ltd, said: “Revenues increased 99 per cent YoY to Rs 8,058mn (PLe of Rs 8,569mn). Revenues from Internet Ticketing/Catering/Rail Neer/Tourism (excluding State Teertha) increased 13.2 per cent YoY/368.4 per cent YoY/75 per cent YoY/156.7 per cent YoY to Rs 3,003mn (PLe Rs 2,962mn)/ Rs 3,344mn (PLe Rs 3,641mn)/Rs 721mn (PLe Rs 885mn)/Rs 695mn (PLe Rs 731mn) respectively. All the segments except Tourism were EBIT-positive. The stock currently trades at 60x our FY24E EPS estimate of Rs 12.7. We currently have a HOLD rating on the stock with a TP of Rs 635.”
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