Indian Railway Catering and Tourism Corporation (IRCTC IN) – Q1FY27 Result Update – Disappointing margin performance – BUY
Published on 14 Aug 2026
IRCTC IN reported weak operational performance with EBITDA margin of 28.2% (PLe of 33.4%) impacted by a one-time employee cost hit of INR200mn arising from gratuity & post-retirement benefits, input cost inflation, and maintenance charge dent of INR100mn within ticketing division. However, revenue grew 18.1% YoY to INR13,695mn (PLe of INR12,714mn) driven by strong traction in catering division due to healthy growth in prepaid trains, license fees, e-catering, and election special trains. Led by capacity expansion at Rail Neer (4 plants to be added) and healthy uptick in catering division, we expect sales CAGR of 11% over FY26-FY28E. However, we expect EBITDA margin of 30.9%/30.5% for FY27E/FY28E respectively, as share of lower yielding catering business rises. IRCTC trades at 28x/25x our FY27E/FY28E estimates. Given decent growth prospects, debt-free BS and healthy return-ratios we retain BUY with a TP of INR706 (35x FY28E EPS; no change in target multiple).
