May 29, 2024
New Delhi, India
IRCTC Q4 Results and Market Reaction
IRCTC’s share price fell over 5% in morning trades after the company announced its Q4 results post-market hours on Tuesday. The share price dropped to ₹1,027.15 on the NSE, down from the previous close of ₹1,083.10. The decline was driven by the reported net profit growth of 2% year-on-year (YoY), which failed to meet market expectations.
Financial Performance Overview
Net Profit:
- IRCTC reported a net profit of ₹284 crore for Q4, up 2% from ₹279 crore in the same period last year.
- Analysts had estimated a net profit of ₹306.6 crore, which the company missed significantly.
- The net profit was also affected by an exceptional charge of ₹7.9 crore, adjusting for which the profit stood at ₹276.3 crore, reflecting a 9.2% YoY increase.
Profit Margins:
- The profit margin for the quarter was 23.9%, below the expected 27.1%.
- Previous profit margins were 26.2% in Q4 FY23 and 28.1% in Q3 FY24.
EBITDA:
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to ₹362.4 crore, an 11.6% increase from ₹324.6 crore in the same period last year.
- The EBITDA margin declined to 31.4% from 33.6% YoY, falling short of the anticipated 34.2%.
- Higher than expected other expenses contributed to the lower EBITDA margins.
Dividend Announcement
For FY24, IRCTC’s board approved a final dividend of ₹4 per share, amounting to 200% of the paid-up share capital. This is in addition to an interim dividend of ₹2.50 per share (125%) declared in November 2023.
Valuations and Analyst Ratings
- The stock is currently trading at 66.1 times the FY25 earnings estimate by Prabhudas Lilladher analysts.
- The analysts have maintained a HOLD rating with a target price of ₹825 per share but plan to review this post the analyst concall on Thursday.
Conclusion
IRCTC’s Q4 results highlight a modest profit growth overshadowed by missed estimates and declining margins. While the market reacted negatively, the dividend declaration offers some reassurance to shareholders. The company’s future performance will depend on its ability to manage expenses and improve profitability.
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