Indian Railway Catering and Tourism Corporation (IRCTC (NS:INIR)) posted a 4.47% increase in consolidated net profit, reaching INR 307.87 crore for Q2 FY25, up from INR 294.68 crore in the same quarter last year. Revenue from operations also saw a 7.21% uptick, climbing to INR 1,064 crore from INR 992.40 crore in Q2 FY24, demonstrating a steady growth trajectory.
Profit before tax registered a 5.4% rise to INR 416.58 crore. However, IRCTC’s expenses also rose, up 9.79% year-on-year to INR 707.38 crore. Notably, catering service expenses increased by 18.9% to INR 346.46 crore, while tourism expenses fell 23.74% to INR 105.02 crore. Meanwhile, the cost of materials consumed was trimmed by nearly 9%, reflecting a modest improvement in operational efficiency.
Examining IRCTC’s segmental performance, catering revenue rose 11.68% to INR 481.96 crore, while its bottled water segment, Rail Neer, grew by 15.66%, generating INR 90.22 crore. The Internet ticketing business surged 13.27% to INR 370.96 crore, though tourism revenue declined by 21.47% to INR 124.45 crore, impacted by seasonal or economic factors.
For the first half of FY25, IRCTC’s net profit jumped 16.83% to INR 615.58 crore despite a slight dip of 8.64% in revenue, totaling INR 1,993 crore. As a gesture of shareholder confidence, IRCTC’s board has announced an interim dividend of INR 4 per share for FY25, with a record date of November 17, 2024.
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Despite IRCTC’s steady financial performance, its share price has dipped by 9.4% over the past three months, currently trading around INR 829.1. According to InvestingPro+, the fair value of the stock is pegged at INR 867.4, indicating a limited 4.6% upside potential.
For investors, IRCTC’s case underscores the importance of accurate valuations in deciding when to buy or hold, with InvestingPro+ providing precise metrics to gauge whether stocks like IRCTC are fairly priced. This is crucial for navigating an often volatile market, ensuring that investments are made based on sound financial fundamentals rather than fluctuating market sentiment.
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