IRCTC Q4 Profit Surges 26% due to Tourism Boost, Shares Rise

Shares of the catering and ticketing subsidiary of Indian Railways rose following the release of solid Q4 earnings.Net profit surged on an aided gain partly and supported by strong performance in tourism.IRCTC, the online ticketing and catering subsidiary of Indian Railways, saw its shares rise on Thursday after releasing its January-March quarter earnings report after market hours yesterday. 

The stock moved up by as much as 3.04%, touching an intraday high of ₹799. As of 11:10 am, IRCTC shares traded  0.02% higher at ₹776.50.

Q4 Financial Overview

IRCTC achieved a consolidated net profit of ₹358 crore during the March quarter, a sizable 26% upshot from ₹284 crore in the corresponding quarter last year. This substantial hike in profitability was driven by a mix of factors: an unusual gain of ₹46 crore and a robust performance of its tourism business.

Operational revenue during the quarter also reflected strong growth, rising by 10% to ₹1,268 crore from ₹1,152 crore during the comparable year-ago period.

Operationally, the firm registered steady performance. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) or operating profit improved by 6% to ₹385 crore. But the EBITDA margin saw a decline, decreasing by 110 basis points to 20.4% from 31.5% during the preceding year quarter.

Segmental Performance Deep Dive

Though IRCTC earns maximum income from the catering business, this segment registered a year-on-year contraction of 0.3% as revenue dropped marginally to ₹529 crore from ₹531 crore.

Its other significant revenue sources were ₹96 crore from packaged drinking water business, Rail Neer, ₹372 crore from internet ticketing, and ₹274 crore from its travel business.

Examine profitability before tax by segments

The company reported strong performance across its key business segments. Catering saw a 39% increase in profit before tax (PBT), reaching ₹64.60 crore. Rail Neer recorded a 10% rise in PBT to ₹11.70 crore. Internet Ticketing posted a 12% growth in PBT, amounting to ₹307 crore. Notably, the Tourism segment witnessed a significant surge, with PBT jumping 163% to ₹50 crore.The huge rise in tourism segment profit clearly helped the company's overall bottom line during the quarter significantly.

Dividend Recommendation

Apart from the quarterly performance, the board of the company also suggested a final dividend of ₹2 per share.The good financial performance, especially the robust profit growth led by exceptional items and tourism, seem to have been liked by the market as well, which has helped the share price of IRCTC go up today.

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