Indian Railway Catering and Tourism Corporation (IRCTC IN) – Q4FY26 Result Update – Disappointing margin performance – BUY
Published on 27 May 2026
We cut our EPS estimates by ~4% for FY27E/FY28E as we fine tune our margin assumptions for internet ticketing and catering division. IRCTC IN reported weak operational performance with EBITDA margin of 27.3% (PLe 33.1%) due to CSR charge of INR310mn and ECL provisioning of INR160mn. Nonetheless, traction in catering division continues to remain strong with top-line growth of 26.7% while EBIT margin of Rail Neer division improved to 16.1% (multi-quarter high). Led by capacity expansion at Rail Neer (4 plants to be added), improved growth visibility in non-convenience fee income and healthy uptick in catering division we expect sales/PAT CAGR of 8%/9% over FY26-FY28E. IRCTC trades at 28x/26x our FY27E/FY28E estimates. Given decent growth prospects, debt-free BS and healthy return-ratios we retain BUY with a TP of INR712 (35x FY28E EPS; earlier 40x). We have revised our target multiple downwards as signs of margin recovery look bleak amid changing revenue composition.
