Indian Railway Catering and Tourism Corporation’s shares declined slightly after a mixed quarterly report highlighted revenue growth but weaker operational margins, with analysts maintaining bullish targets based on catering expansion and diversification strategies.
IRCTC shares slipped after the railway caterer and ticketing group posted a mixed first-quarter update, even as revenue rose sharply. According to Indian Railway Catering and Tourism Corporation’s results for the quarter ended 30 June 2026, consolidated revenue from operations increased 18% year on year to ₹1,369.52 crore, while consolidated profit after tax was broadly flat at ₹330.16 crore. The stock closed 1.38% lower at ₹497.50 after touching an intraday low of ₹495.30. ()
PL Capital said the headline revenue growth masked a weaker operational showing, pointing to an EBITDA margin of 28.2% against its estimate of 33.4%. The brokerage said the shortfall reflected a one-time employee cost of ₹2 crore linked to gratuity and post-retirement benefits, higher input costs and a ₹1 crore maintenance charge in the ticketing business. It said catering remained the main growth engine, supported by better traction in prepaid trains, licence fees, e-catering and special election trains. ()
The brokerage retained its buy recommendation and target price of ₹706, saying IRCTC still has a debt-free balance sheet and strong return ratios. PL Capital expects sales to grow at an annual compound rate of 11% over FY26-FY28, helped by a planned expansion of Rail Neer water production, with four plants due to be added. It sees margins settling near 31% in FY27 and 30.5% in FY28 as the mix tilts further towards lower-yielding catering revenue. ()
Other brokerages have also stayed positive on the stock. Prabhudas Lilladher recently assigned a buy rating with a target of ₹712, arguing that catering growth and expansion in Rail Neer should support earnings, while a separate earlier note from the firm put the target at ₹840 and highlighted high e-ticketing penetration and the role of non-convenience fee income in driving future growth. (moneycontrol.com)
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
