IRCTC Q2 Results Review - Miss Led By Deeper Seasonality; OPM Improves On Better Mix: Dolat Capital

Dolat Capital Report

IRCTC Ltd. reported a revenue decline of 4.8% QoQ (our estimate: +4.4%) due to lower volumes in the Catering/Rail Neer segment, which were down by 14%/19% QoQ led by adverse seasonality as well as lower revenues from one-time elections related service in Q1.

Operating profit margin improved to 33.8% (up 150 bps QoQ) driven by more favorable business mix; although was down 7% QoQ. PAT stood at Rs 3,079 million (inline); flat QoQ and up 4.5% YoY despite better other income (up 17% QoQ).

Additionally, IRCTC declared an Interim Dividend of Rs 4 per share versus Rs 2.5 in Q2 FY24.

We tweak our FY25/26E EPS estimates by 2%/5%, due to slower gains in catering clustering led re-pricing and a decline in Tourism segment.

Further, we introduce FY27E estimates with 11% revenue growth and EPS of Rs19.2/share. Maintain ‘Accumulate’ rating with DCF-based target price of Rs 900 implying 47 times on FY27E earnings.

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