Shares of Indian Railway Catering And Tourism Corporation Limited or IRCTC fell nearly 3.60 percent in early trade on Tuesday, touching a six-month low, after the company's September-quarter results failed to meet analysts' expectations.
The stock opened the trading session at ₹750 apiece, ₹8.80 lower, and declined further to hit an intraday low of ₹731.55 early on. However, it made a recovery soon, trading at ₹740.20, down 2.45 percent, around 1:00 pm.
On Monday, IRCTC reported a 42.54 percent rise in its standalone net profit to ₹226 crore for the September quarter as against ₹158.57 crore in the same quarter of the previous fiscal. However, sequentially, the net profit was down 7.95 percent. In the first quarter of the current fiscal year, the company had reported a net profit of ₹245.52 crore.
Revenue from operations increased 97.53 percent to ₹831.8 crore during the quarter, compared to ₹421.1 crore in the corresponding quarter of the previous fiscal. The company's expenses came in higher at ₹500.9 crore in Q2 from ₹193.4 crore in the same quarter of the previous fiscal.
It reported an operating profit of ₹304.9 crore for the September quarter, an increase of 33.29 percent when compared to ₹211.5 crore in the corresponding quarter of the last fiscal. EBITDA margin came in at 37.83 percent, down 1,440 basis points (bps) from the same quarter of last year. However, quarter on quarter, the margin was up 19 bps.
On the fundamental side, the company has had zero debt, Trendlyne data showed. The company has a Return on Equity of 28 percent and a ROCE of 36.40 percent (5-year average), respectively. It has a price-to-earnings ratio of 66.36x compared to the peer average of 66.24x.
YTD, the stock has dropped from around ₹832 to ₹758, showing an 8.86 percent decline. However, over the last two years, the stock has delivered a massive return of 174 percent.
The stock made a strong debut on October 14, 2019, when it was listed at a premium of 101 percent at ₹644 over the IPO price of ₹320 and closed at ₹728.6, a 127.7 percent premium over the issue price, on the first day.
In August 2021, the company announced a 1:5 stock split to increase market liquidity, broaden the shareholder base, and make shares more accessible to small investors. At the time of the announcement, the stock was trading at around ₹2,750. Just two months after the announcement, the stock rose to ₹5,593.85 per share. The shares of the company have been quoted on an ex-split basis since October 28, 2021.
The promoters own 67.40 percent of the shares in the company, while foreign portfolio investors and domestic institutional investors each own 5.8 percent and 5.6 percent, respectively. Regular shareholders own 21.2 percent.
An average of 6 analysts polled by MintGenie have a 'sell' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
