IRCTC Q4 Results Review - Growth Intact, Margin Declines; FY25 Outlook Remains Optimistic: Dolat Capital

Dolat Capital Report

IRCTC Ltd. reported rev. growth of 3.3% QoQ (our estimate: 2.9%) led by higher volumes in the catering and tourism segment, which were up by 4.5%/3.2% QoQ. Ebit stood at Rs 3.5 billion, down 8.8% QoQ versus our estimate: Rs 3.9 billion led by an increase in operating costs: catering/employee/other costs up by 13%/11%/55% QoQ.

Company eyes growth beyond catering (FY24 driver), anticipating a multi-pronged approach to growth in FY25 by leveraging IR’s expanding infra and economic opportunities to capitalise on entire travel journey. With incremental growth expected in ticketing, IRCTC acknowledges significant potential in its under-developed segments like packaged bottle and tourism products.

We believe FY25 to see Tourism led demand across all biz units and thus would expect it to deliver healthy performance.

We maintain ‘Accumulate’ rating with DCF based target price of Rs 1,150 implying 63 times on 26E earnings.

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