Indian Railway Catering and Tourism Corporation (IRCTC) is an Indian public sector undertaking that provides ticketing, catering, and tourism services for the Indian Railways. It was initially wholly owned by the Government of India and operated under the administrative control of the Ministry of Railways but has been listed on the National Stock Exchange since 2019, with the Government continuing to hold majority ownership.
The IRCTC was established on 27 September 1999, as a public sector undertaking completely owned by the Government of India through the Indian Railways. It is the only entity that is authorised to provide certain services to the Indian Railways, including online ticketing, catering, and selling drinking water on trains and at railway stations. In May 2008, it was classed as a Miniratna public corporation, which allowed it a certain degree of financial autonomy.
The IRCTC was listed on the National Stock Exchange in 2019, following which the Government of India’s holding was reduced to 87%, with the remaining shares being publicly traded. In December 2020, the Government of India divested another 20%, reducing its holding in the IRCTC to 67%.
Quarterly Earnings Walkthrough
IRCTC reported a 22 percent on-year rise in its standalone net profit at Rs 256 crore for the third quarter (October-December 2022) of the current fiscal year from Rs 209 crore for the same quarter of the previous fiscal year.
IRCTC’s standalone revenue from operations have skyrocketed by 70 percent to Rs 918 crore from Rs 540 crore Year-on-Year (YoY).
The computed EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) has risen by 17 percent to Rs 326 crore from Rs 280 crore in Q3 FY22. The EBITDA margin declined to 35.5 percent from 51.7 percent by the impact of rising expenses in catering services and tourism businesses.
Segment wise performance
Revenue from State Teertha has jumped by 467% YoY to Rs 25.5 crore.
Revenue from catering spiked by 276% YoY to Rs 394 crore.
Revenue from Rail Neer and Tourism has risen by 58% YoY to Rs 79 crore and by 80% YoY and Rs 122 crore, respectively.
Revenue from internet ticketing has fallen by 4% YoY to Rs 301 crore.
Declaration of Dividend
The Board of Directors has approved an interim dividend of Rs 3.50 per equity share of face value of Rs. 2 each for the financial year 2022-23, which is 175% of paid-up share capital. The record date has been set to 22nd February 2023 for the purpose of paying the interim dividend.
Technical Analysis
IRCTC stock price is hovering above the 61.8% retracement level and the price has taken support at this level multiple times. The weekly MFI is at 27 points which genuinely marks the stock as oversold. The price is below the 50-day exponential moving average which additionally gives an oversold indication. Long term investors who require an excellent government owned company should invest into IRCTC at the current levels around the 61.8% retracement level.
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