IRCTC share price declines 5% post Q4 results as net profit growth misses estimates: announces dividend

Stock Market Today: Indian Railway Catering and Tourism Corporation Ltd (IRCTC) share price declined more than 5% in morning trades post Q4 results announced by the company after the market hours on Tuesday.

The IRCTC share price dipped to lows of ₹1,027.15 on the NSE in morning trades , dipping more than 5% compared to previous close of ₹1,083.10.

The reported net profit by IRCTC at ₹284 Crore grew 2% year on year compared to ₹279 crore in the same period last year.

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Net profit misses estimates

The reported net profit however was also impacted by exceptional charge of Rs7.9 crore that was due to excess provisions written back for previous years relating to various expenses.

Adjusting for the same and all other one-offs the net profit as per Prabhudas Lilladher analysts calculations came at Rs276.3 crore. This though up 9.2% year on year, however missed Prabhudas Lilladher analysts' estimates of ₹306.6 crore. The profit margins at 23.9% as per them also missed the estimates of 27.1% as against 26.2% and 28.1% in 4QFY23 and 3QFY24 respectively.

On the operational front , earnings before interest, taxes, depreciation, and amortization (EBITDA) for the railway PSU increased to ₹362.4 crore from ₹324.6 crore in the same period the previous year, an increase of 11.6%. The margin however at 31.4%, declined from 33.6% during the same period last year.

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The Ebitda margins also came lower than estimates as analysts at Prabhudas Lilladher said that they expected Ebitda margin of 34.2% . The miss in margins was led by higher than expected other expenses, said analysts.

Catering , Internet Ticketing drive revenue growth

The e-ticketing and catering company of the Indian Railways, IRCTC recorded a 19% increase in operating revenue to ₹1,155 crore in the March quarter, up from ₹965 crore in the same period last year.

The revenue growth for IRCTC is being led by core Catering and internet ticketing business while smaller segments as Rail Neer and Tourism also supported though with slower growth.

Rail catering revenues at ₹530 crore grew 34.1% YoY while internet ticketing revenues at ₹342 Crore grew 16% year-on-year. Tourism revenues at Rs154. 7 grew 11.6% year-on-year while Rail Neer revenues at ₹83 crore also improved 13.1% YoY. The Rail Teerth revenues however declined. Nevertheless, on the positive side all the segments see positive Earnings before interest tax (Ebit).

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Dividend

For FY24, IRCTC board has approved a final dividend of ₹4 per share, or 200 percent of the paid-up share capital, with a face value of Rs. 2. This is in addition to an interim dividend of Rs.2.50 per share (i. e 125 per cent of the paid-up share capital) declared by the company in the month of November 2023

Valuations

The stock currently trades at 66.1 times FY25 earnings estimate of Prabhudas Lilladher analysts. They currently have a HOLD rating on the stock with a target price of Rs825 a share, however will review the same post analysts concall on Thursday.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions