IGI Logo

A mixed quarter

Quick Pointers:

* ~136mn tickets were booked with a convenience fee income of Rs2,520mn

IRCTC IN reported a mixed set of results with an EBITDA margin of 35.3% (PLe 36.4%) while PAT was marginally better than our estimate aided by higher other income of Rs630mn (PLe Rs559mn) As e-ticketing penetration has reached ~89%, we expect non-convenience pie to drive the revenue growth in internet ticketing division. As for rail neer, capacity expansion at Danapur & Ambernath and addition of 4 new plants will provide the growth fillip. We broadly maintain our estimates and expect sales/PAT CAGR of 7%/9% over FY25-FY28E. IRCTC trades at 37x/35x our FY27E/FY28E EPS estimates (1-year forward LPA is 48.3x) with healthy return ratios (average RoE/RoCE of 32%/38% over the next 3 years). Retain BUY with a TP of Rs840 (44x FY27E EPS; no change in target multiple).

Revenue up 7.7% YoY: Revenue increased 7.7% YoY to Rs11,460mn (PLe of Rs11,641mn). Catering revenue increased by 7.8% YoY to Rs5,197mn (PLe Rs5,302mn) with an EBIT margin of 12.9% (PLe 13.0%). Internet ticketing revenue increased 4.0% YoY to Rs3,859mn (PLe Rs3,898mn) with an EBIT margin of 84.7% (PLe 83.1%). Rail Neer revenue increased 4.3% YoY to Rs941mn (PLe Rs1,010mn) with an EBIT margin of 9.2% (PLe 13.0%). Revenue from Tourism surged by 20.2% YoY to Rs1,495mn (PLe Rs1,431mn) with an EBIT margin of 6.8% (PLe 8.5%).

EBITDA increased 8.4% YoY: EBITDA increased 8.4% YoY to Rs4,042mn (PLe Rs4,239mn) with a margin of 35.3% (PLe of 36.4%) as against 35.0% in 2QFY25. Miss at the EBITDA level was primarily due to higher tourism expenses at Rs1,201mn (PLe Rs1,102mn). PAT increased 11.1% YoY to Rs3,420mn. After adjusting for a one-time income of Rs58mn pertaining to Tejas Express, adjusted PAT increased 9.2% YoY to Rs3,362mn (PLe of Rs3,440mn).

Con-call highlights: 1) E-booking penetration stands at 89.2%. 2) ~136mn tickets were booked in 2QFY26. 3) UPI share was at 49.8% in 2QFY26. 4) Convenience fee income stood at Rs2,520mn. 5) Ticketing mix for AC/Non-AC segment stood at 67.5mn/68.0mn respectively. 6) IRCTC IN currently provides mobile catering services across 1,318 trains, including 15 Amrit Bharat trains, though none operate under the prepaid model yet. 7) The Bilaspur plant (capacity of 72K bottles/day) is set to restart operations soon. Further, capacity expansion is planned at Danapur and Ambernath plants from 1 lakh bottles/day to 3 lakh bottles/day. In addition, there are plans to commission 4 more plants across India. 8) IRCTC IN has entered MICE business and aims to maintain a minimum margin of 8%, with a cluster-based approach to target government and PSU clients. 9) Exceptional income of Rs58mn pertains to reduction in fixed, variable and custody charges for the Tejas Express trains. 10) Tejas Express generated Rs373mn/Rs34mn in revenue/profit respectively, with occupancy of 87%/56% on the Mumbai-Ahmedabad/ LucknowDelhi route. 11) In the co-branded card business, RBL Bank has been added as a new partner. 12) Loyalty card revenue rose 26.7% YoY to Rs154mn.

Please refer disclaimer at https://www.plindia.com/disclaimer/

SEBI Registration No. INH000000271