07-Nov-2023
2 mins read
Indian Railway Catering and Tourism Corporation (IRCTC) has delivered an impressive performance for the second quarter of the fiscal year 2023-24, showcasing significant growth in profits and revenue, along with a promising increase in various service segments.
A Surge in Net Profit and Revenue
IRCTC’s recent financial disclosures show a significant profit jump of 30.36%, with net earnings reaching Rs 294.67 crore, a rise from the prior year’s same quarter figure of Rs 226.03 crore. The substantial boost in profits is largely due to increased sales from ticketing and catering operations. The company’s total revenue also saw a healthy growth of 23.51%, with figures touching Rs 995.31 crore, an increase from Rs 805.80 crore in the same quarter last year.
Understanding EBITDA Movements
The corporation’s income, excluding the costs of interest, taxes, depreciation, and amortisation, rose by 20.2% to Rs 366.5 crore. However, there was a slight decrease in the EBITDA margin, which declined to 36.8% from the 37.8% recorded in the same quarter the previous year. The decrease in margin is primarily due to the higher contribution from segments like catering, state teertha, and tourism, which typically offer lower margins compared to internet ticketing.
Interestingly, the revenue share from internet ticketing fell to 32.8% from 37.1% in the previous year, indicating a diversification in the company’s revenue streams.
Rewarding Shareholders
In light of the positive financial results, the Board has declared an interim dividend of Rs 2.50 per equity share with a face value of Rs 2 each. This declaration accounts for 125% of the paid-up share capital, summing up to Rs 160 crore. The company has set November 17, 2023, as the record date for the interim dividend for FY 2023-24.
IRCTC’s Service Expansion and Ownership
IRCTC, the only entity authorized by the Indian government for online railway tickets, catering services, and packaged drinking water in Indian Railways, has expanded its portfolio to include luxury train tours, hotel bookings, and holiday packages. As of the second quarter of fiscal year 2024, the Indian government maintains a 62.4% ownership in IRCTC, with foreign and domestic institutional investors possessing 7.1% and 10.5% stakes respectively, and the rest 20% is held by individual investors. Following the announcement of the financial results, IRCTC’s stock experienced a favorable rise, ending the day 1.68% up at Rs 682.75 on the National Stock Exchange, indicating the investors’ trust in the company’s continued expansion.
IRCTC’s performance this quarter not only highlights its financial resilience but also its potential to scale newer heights in the burgeoning Indian travel and tourism sector.