IRCTC Q3 Results Review - Strong Beat Led By Catering/Tourism; Outlook Remains Optimistic: Dolat Capital

Dolat Capital Report

IRCTC Ltd.'s reported revenue growth of 22% YoY (our estimate: 17%) led by new contract addition/better renewals in catering (up 29% YoY) and sustained momentum in travel and new route launches in Tourism segment (32% YoY).

Ebit stood at Rs 3.8 billion, up 7.8% QoQ versus our estimate: Rs 3.7 billion led by improvement in Tourism segment, which reported positive margins at 10.4% versus -5.8% and State Tirtha, which reported 486 basis points growth in margins at 22.4%.

The commentary remains confident based on continued addition in new contracts in catering, capacity addition in Rail Neer (one added in Q3, one by end of FY24) plants and significant jump in new tour-routes.

We believe FY24 to see Tourism led demand across all biz units and thus would expect it to continue to deliver healthy performance. Maintain 'Accumulate' rating with discounted cash flow based target price of Rs. Rs 1,000 implies 53 times on 26E earnings.

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