IRCTC, a Miniratna under the Ministry of Railways, is preparing to announce its interim dividend for FY25. The board of directors will meet on November 4, 2024, to review and approve the unaudited financial results for Q2 and H1 FY25, as well as to consider declaring the interim dividend. The record date for determining shareholder eligibility for the dividend, if approved, has been set for November 14, 2024.
In FY24, IRCTC delivered a dividend of 325%, amounting to ₹6.5 per share, and currently has a dividend yield of 0.78%. Despite its strong financials, IRCTC’s stock has been under pressure, with the share price down 6.8% year-to-date (YTD). On October 23, 2024, the stock traded at ₹821.65 apiece on the BSE, reflecting a 1.2% decline from the previous day’s price. The stock’s 52-week high is ₹1,148.30, and its low is ₹636.10. At present, the company’s price-to-equity ratio stands at 56.05x, with a solid return on equity of 36.74%.
Despite growth expectations in FY25, analysts remain cautious. Prabhudas Lilladher highlighted concerns about IRCTC’s operational performance, particularly in its internet ticketing division, where growth appears to have plateaued. The division has seen increased UPI transactions, limiting margin expansion. Catering and internet ticketing contributed 45% and 30% to the company’s top-line in FY24, with internet ticketing accounting for 77% of EBIT. While the catering division continues to grow, its lower margins are expected to limit earnings surprises.
According to Trendlyne, seven analysts have issued a consensus “SELL” recommendation on IRCTC stock, despite an expected 25.7% growth in earnings per share (EPS) in FY25. The average one-year target price is ₹857.86, implying a potential 4% upside. However, Prabhudas Lilladher retains a “REDUCE” rating, with a target price of ₹822, citing limited room for earnings growth in the key internet ticketing segment. The firm projects a sales/PAT compound annual growth rate (CAGR) of 11% and 12% over FY24-FY26.
Disclaimer: The information provided is for informational purposes only and should not be considered as financial or investment advice. Investors are advised to conduct their own research or consult with a financial advisor before making any investment decisions. Stock market investments are subject to market risks, including the potential loss of principal. Past performance does not guarantee future results.
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