IRCTC stock slips nearly 4% as Q2 earnings miss estimates

Shares of Indian Railway Catering and Tourism Corporation Ltd (IRCTC) slipped over 3% in early trade today after Q2 earnings of the Indian railways’ ticketing arm fell below expectations.  IRCTC’s profit after tax rose 42.54% to Rs 226.03 crore in the September quarter against Rs 158.57 crore in the corresponding quarter last year. 

Brokerage Prabhudas Lilladher expected a 55.9 per cent YoY rise in net profit to Rs 247.20 crore in the last quarter.  IRCTC stock has fallen after 2 days of consecutive gain. The IRCTC stock hit an intraday low of Rs 731.5, down 3.61% on BSE.  

IRCTC shares are trading higher than the 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.  The IRCTC stock has lost 18.08 per cent in a year and fallen 11% in 2022.  

Total 2.75 lakh shares changed hands amounting to a turnover of Rs 20.31 crore on BSE. 

Market cap of IRCTC fell to Rs 59,248 crore. The stock hit a 52 week high of Rs 929.65 on November 16, 2021 and a 52 week low of Rs 557 on July 6, 2022.  

IRCTC’s revenue from operations zoomed 99% to Rs 805.80 crore in Q2FY23 against  Rs 404.93 crore in Q2FY22. However, the company’s total expenses rose 152.84% to Rs 524.33 crore in Q2 from Rs 207.37 crore in Q2FY22. 

The company’s EPS also climbed to Rs 2.82 in Q2FY23 from Rs 1.98 in Q2FY22. Revenue from the catering business rose 368% to Rs 334 crore year-on-year.  Revenue from internet ticketing rose 13.17% to Rs 300.25 crore in Q2FY23 against Rs 265.30 crore in Q2FY22 . Revenue from tourism increased 156% to Rs 69.45 crore YoY. 

Ahead of the announcement of Q2 , IRCTC stock ended 1.46% lower at Rs 758.90 on November 14.      

Arijit Malakar, Equity Research Analyst, Ashika Research said,"Sequentially, IRCTC reported a weak set of 2QFY23 numbers, though there has been seasonal impact due to the monsoon season. The numbers were strong on a YoY basis due to the low base effect last year. The catering and internet ticketing business continued its growth momentum. IRCTC has now a share of 82% in total rail ticketing and this share is likely to go up. The long-term growth story of IRCTC is likely to remain intact given its unique offerings and monopolistic business in internet railway ticketing, catering, and packaged water."

Jinesh Joshi – Research Analyst, Prabhudas Lilladher said,"The stock currently trades at 60 times our FY24E EPS estimate of Rs 12.7. We currently have a HOLD rating on the stock with a target price of Rs 635." 

In Q1 of the current fiscal, IRCTC reported a 196 per cent rise in net profit. The firm that provides ticketing, catering, and tourism services for the Indian Railways reported a profit of Rs 246 crore, for the quarter ended June 30. It reported net profit of Rs 82.5 crore in the year-ago period (Q1 FY22). Revenue from operations rose 251 per cent to Rs 853 crore in Q1 this fiscal from Rs 243 crore in Q1 FY22. Total income rose to Rs 877 crore in Q1 FY23 as compared to Rs 258 crore in Q1 FY22.

Also Read: GMP update: Bikaji Foods, Global Health, Archean Chemical, Kaynes Tech & Inox Green

Also Read: NMDC shares slide 4% after Q2 results. Should you buy, hold or sell?