IRCTC Q1 Results Review - Long Term Positive With Nav-Ratna: IDBI Capital

IDBI Capital Report

Indian Railway Catering and Tourism Corporation Ltd. reported subdued (3% QoQ) revenue mainly due to impact on tourism and internet ticketing segments. However, YoY growth was led by catering (17%) and rail neer (16%). Going forward, the company will benefit by increased capacity due to discounted cash flow, increase in Vande Bharat trains which in return increase in margins as well.

Hence, we are building robust growth in Catering and Tourism revenues resulting in growth of 16% & 13% for FY25E-FY26E. Further, IRCTC plans to increase its bottling capacity in Mysore or Varanasi.

We have built in 7% revenue compound annual growth rate for rail neer over FY24-FY26E. Overall we have built in revenue and Profit after tax compound annual growth rate of 14% & 19% over FY24-FY26E.

We maintain our 'Hold' rating on the stock with maintaining target price of Rs 991 (48 times FY26E earning per share).

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