Indian Railway Catering & Tourism Corporation Ltd. share price target

IRCTC delivered a strong set of numbers despite challenges from the second wave impact during the quarter as catering segment revenues improved, rail-neer segment turned EBIT positive after 4 quarters and internet ticketing segment continues to deliver strong margins. Revenues were higher than estimate due to higher revenue from catering segment, but EBITDA and PAT were in-line. Margins declined sequentially due to lower volumes. The company reported an 85% YoY increase in revenues to Rs2,434mn, driven by a pick-up in revenues across all business segments, but largely driven by the internet ticketing segment (now 60%+ revenues). EBITDA increased to...

IRCTC continued to show meaningful sequential improvement in revenue and profitability in Q4FY21, despite several segments being affected severely by the pandemic. The company reported a 51% QoQ increase in revenues to Rs3,388mn, driven by a pick-up in revenues across all business segments, but largely driven by the internet ticketing segment (now 60%+ revenues). EBITDA increased by 55% QoQ to Rs1,463mn in Q4FY21. Despite higher exceptional items, primarily due to one-off provisioning for previous years Performance Related Pay (PRP) and claims against railways, net Income increased 33% QoQ to Rs1,038m resulting in an EPS of Rs6.7. We...

Currently ~1,500 trains and ~250 pantry cars (out of 417) are operational. disrupted due to 2nd wave our FY23E estimates are broadly intact as we coming in from conversion of certain unreserved coaches into the reserved category. Additional volume lever is not ruled out from rise in e-booking penetration (reached ~90%+ amid COVID; up from ~70-75% levels prevailing...

The mobile catering contracts that were in abeyance got terminated due to change in scope of work (shift from cooked to ready to eat meals) and there has been no change in catering policy so far. License fee refund has already been provided. There is no change in the catering...

While on YoY basis the impact of Covid-19 pandemic continued to weigh on IRCTC's business segments, it reported a meaningful QoQ improvement in revenue/profitability in Q3FY21. In Q3FY21, revenue grew by a strong 1.5x QoQ to Rs2,244 mn. EBITDA saw an even better improvement to Rs946 mn vs. a loss of Rs56 mn in Q2. Even EPS saw a strong growth to Rs4.9 vs. Rs0.3 QoQ. We factor delayed recovery mainly in catering and tourism segment and cut FY21/22 EPS by 33%/4.2%. However, we remain confident of FY22 EBITDA and EPS surpassing FY20 levels. Our FY23, EPS forecast remains unchanged. We maintain BUY with TP of...

We cut our FY21E EPS estimates by 50% given the uncertainty in timeline regarding complete resumption of rail services. However, our FY22E/FY23E estimates are broadly intact as 1) resumption of Tejas Express from 17 th Oct and 2) increase in convenience revenue to ~25% of the pre-COVID levels in...

We initiate coverage on Indian Railway Catering and Tourism Corporation (IRCTC) with TP of Rs1,800 based on PER of 35x FY23E. We believe that IRCTC is a one-of-its-kind company. In its top-2 segments internet ticketing and catering services (combined ~89% of FY20 EBIT) it is the sole service provider. Internet ticketing as digital platform business has seen 302 mn bookings in FY20 with ~73% share in total railway ticket booked in India. In its packaged drinking water business it's pricing provides a competitive edge. While Covid-19 pandemic will impact FY21 performance, we expect strong pick-up in FY22/23E. We forecast revenue/EBIT/EPS CAGR of 9.2%/14.4%/15.9%...

IRCTC's performance was marred by COVID-19 during 4QFY20 (impact was evident from the month of Jan itself), with revenue/EBITDA miss of 4%/8% respectively. Since convenience fee on e-ticketing was absent in the base quarter (levied from 01st Sep 2019), optically growth appears to be higher. However, on a QoQ basis revenue/EBITDA declined 18%/24% respectively....

back once COVID fear resides as structural levers remain intact. The stock currently trades at 13.6x FY22 EPS and looks attractive from long term. Retain BUY. However, we would advise staggered buying and do not rule out near term weakness given the constantly evolving situation over lockdown. Further, risk of reduction/abolishment in service charge has magnified as COVID is a black swan event and government can take a socialist approach to deal with the current situation. The impact on IRCTC's earnings assuming 1-month benchmark (complete...

Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) is a wholly-owned subsidiary of Indian Railways, Government of India. It is a Mini Ratna (Category-I Central Public Sector Enterprise), incorporated in 1999 as an extended arm of the Indian Railways with the objective to upgrade, modernize, professionalize and manage the catering and hospitality services at stations, on trains and other locations, online ticket booking services, packaged drinking water and to promote domestic and international tourism through development of budget hotels, special tour packages, information & commercial publicity...