Shares of Indian Railway Catering and Tourism Corporation (IRCTC) dropped nearly 4% in early deals on Tuesday after the ticketing and catering arm of Indian Railways reported lower-than-expected earnings for the September quarter of 2022 (Q2 FY22). The state-owned company has reported year-on-year growth in its top and bottom line, but it declined on a sequential basis. Both the profit and revenue growth was driven by a low base in the year-ago quarter and improvement in the overall demand.
Reacting to Q2 earnings, IRCTC share price opened 1.7% lower at ₹746 against the previous closing price of ₹758.90 on the BSE. In the first two hours of trade so far, the large cap stock declined as much as 3.6% to hit a low of ₹731.50.
At 11:00 am, the railway stock was trading 2.4% lower at 740.90, while market capitalisation slipped to ₹59,276 crore. On the volume front, 2.73 lakh shares changed hands over the counter on the BSE, as compared to the two-week average volume of 2.69 lakh stocks.
In comparison, the BSE benchmark Sensex also witnessed weak trade, falling 110 points to 61,514 levels, led by ITC, Kotak Mahindra Bank, Tech Mahindra Ltd. (-1.07%), Reliance Industries, and Tata Consultancy Services, which fell up to 1%.
IRCTC shares have delivered a negative return of 18% to its shareholders in the past one year despite gaining 13% in the past six months. In the past one month, the stock has climbed nearly 2% as compared to over a 5% rise in the BSE Sensex. The counter touched a 52-week high of ₹929.65 on November 16, 2021, and a 52-week low of ₹557 on June 6, 2022. The state-owned company has given a stellar return to investors since its listing in 2019 by rising 375% during this period.
For the second quarter ended September 30, 2022, IRCTC reported 42.5% growth in its profit after tax (PAT) at ₹226 crore against ₹158.57 crore a year ago. However, on a quarter-on-quarter (QoQ) basis, it dropped 7.9% from ₹245.52 crore in the June quarter of the current fiscal.
Revenue from operation almost doubled to ₹806 crore from ₹405 crore in the corresponding quarter last fiscal. On a sequential basis, it fell 5.4% from ₹853 crore in Q1 FY23.
The total expenses of the company jumped 47.75% from ₹55.11 crore in Q2 FY22, to ₹81.42 crore during the quarter under review.
Segment-wise, revenue from catering services grew multi-fold to ₹334 crore as against ₹71 crore in the same period last fiscal when trains and catering services were resumed after being hit by the Covid-19 pandemic. The revenue from the internet ticketing business rose 13% to ₹300 crore from ₹265 crore in the year-ago period.
Indian Railways suffered a massive loss last fiscal, as several revenue-making operations remained suspended for months in wake of the Covid-19 pandemic and the subsequent lockdowns. However, the situation has improved in the last one year, thanks to a rise in income from passenger traffic and catering services.
