IRCTC Q2 Results Review - Optionality Can Emerge In Catering Business: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.We re-align our Ebit margin assumptions for catering division resulting in a marginal earnings per share upgrade of ~1% over FY24-FY26E. Indian Railway Catering and Tourism Corporation Ltd. reported better than expected operational performance with Ebitda margin of 36.8% (our estimate: 34.0%) led by a beat in catering segment. We believe catering division has earnings optionality arising from-tie-up with Zomato Ltd.,managing trains/coaches booked on full tariff rate, ~200 contracts that are in pipeline andexpected onetime gain arising from increase in license fee which has been pending as the matter is sub-judice. We expect profit after tax compound annual growth rate of 11% over FY23-FY26E given-traction in non-convenience revenue,rail neer expansion andhealthy growth in catering segment. However, we believe IRCTC's valuations at 43 times/41 times for our FY25E/FY26E EPS estimates price in most of these benefits and thus we maintain our ‘Hold’ rating on the stock with a target price of Rs 709 (45 times FY25E EPS; no change in target multiple)..Click on the attachment to read the full report:.IRCTC Q2 Results: Profit Rises 30% On Higher Catering Sales.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

IRCTC Q2 Results Review - Optionality Can Emerge In Catering Business: Prabhudas Lilladher

~116 million tickets booked, that yielded convenience fee revenue of ~Rs 2.2 billion.

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