IRCTC Q1 results preview: Net profit likely to rise 12% to Rs 275 crore, margin may shrink by over 300 bps

State-run Indian Railway Catering and Tourism Corp (IRCTC) — the only firm authorised by the Indian Railways to offer online railway ticket-booking services and provide food services onboard trains — is scheduled to report its financial results for the April-June period on Wednesday, August 9. Analysts expect IRCTC's low-margin catering business to lead to overall margin pressure for the quarter.

According to Zee Business research, IRCTC is estimated to report a net profit of Rs 275.4 crore for the first quarter of the current financial year, translating to growth of 12.2 per cent compared with the corresponding period a year ago. The analysts expect the company to see a 20.2 per cent year-on-year increase in revenue to Rs 1,025 crore for the quarter ended June 30, aided by its catering unit. 

Indian Railway Catering and Tourism Corp is expected to report Rs 355 crore in earnings before interest, taxes, depreciation and ammortisation (EBITDA) as against Rs 321 crore for the year-ago period, according to the research.

Zee Business analysts peg the company's overall margin — a key measure of profitability — at 34.6 per cent, marking a decline of 305 basis points on a year-on-year basis. They estimate its catering business to register growth of 20 per cent and 60 per cent in catering and tourism units respectively. 

How IRCTC fared in the March quarter

For the final quarter of the financial year 2022-23, IRCTC reported a 30.4 per cent increase in consolidated net profit to Rs 278.8 crore. Its revenue grew 16.6 per cent to Rs 965 crore and margin contracted by 667 basis points to 33.64 per cent. 

Both the top- and bottom-lines met analysts' estimates but the margin fell short of their expectations. 

Zee Business analysts had estimated the company's net profit at Rs 258.6 crore, revenue at Rs 942 crore and margin at 35.72 per cent for the quarter ended March 31. Read more on IRCTC Q4 earnings

IRCTC shares

The IRCTC stock finished the June quarter with a gain of 10.9 per cent, in line with a 10.5 per cent rise in the benchmark Nifty index. However, as of August 8, IRCTC shares had turned flat for the year, underperforming a 7.6 per cent gain in the headline index.