IRCTC shares rise 10% in four sessions. Brokerage gives Hold tag post Q4 results
Premium- Brokerage Prabhudas Lilladher has maintained Hold rating on IRCTC shares
IRCTC's net profit more than doubled during the January-March period to ₹214 crore, compared with ₹104 crore in the corresponding period of last year. The catering and tourism arm of Indian Railways, reported 103% growth in revenue from operations to ₹691 crore in the fourth quarter as against ₹339 crore year-on-year (YoY).
While IRCTC’s top-line was ahead of consensus estimate due to strong beat on catering front amid resumption of cooked meal services, EBITDA margin at 40% was below estimates as Rail Neer business reported an EBIT loss due to a one-off charge of ₹271 mn.
Brokerage Prabhudas Lilladher has maintained its Hold rating on Indian Railway Catering and Tourism Corporation (IRCTC) shares with a DCF based target price of ₹648. Shares of IRCTC have surged about 10% in last four trading sessions, whereas the stock is up 82% in a year's period.
“Despite a beat on revenue front, our FY23E/FY24E EPS estimates are broadly intact as we have already accounted for positives arising from rail neer expansion and catering price hike. Recommendation of reversal in 2S sitting class to unreserved category is also baked into our assumptions given the announcement was made in March," the note stated.
Revenues increased 104% from last year's quarter due to base effect and higher than expected revenue from catering division amid resumption of cooked meal services, finalization of new tenders and addition of 70+ trains within TSV segment.
Segment wise, revenues from catering business have risen nearly 300% to ₹267 crore in the reporting period, compared with a meagre ₹67 crore in the same period last year. Meanwhile, internet ticketing revenue increased 38% to ₹292 crore, while that from the tourism segment rose 74% to ₹54 crore.
The company's board has recommended a dividend of ₹1.50 per share for the financial year 2021-22.
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