IRCTC Q2 profit jumps nearly five-fold; stock stabilises after convenience fee jolt

Indian Railway Catering and Tourism Corporation (IRCTC) on Monday reported a jump of almost five times in its net profit for the second quarter, as a recovery in rail traffic boosted its revenue.

The state-run company posted a net profit of Rs 158.6 crore for the three months through September, compared with Rs 32.6 crore for the corresponding period a year ago.

Revenue from operations surged to Rs 405 crore from Rs 88.6 crore a year earlier.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) soared to Rs 211.5 crore for the July-September period from Rs 5.6 crore a year earlier.

Shares of IRCTC bounced back from intraday losses after the results were announced. The shares closed 1.6% higher at Rs 859 apiece on the BSE in a Mumbai market that gained 1.4%.

The shares had plunged as much as 29% on Friday after the company said after market hours on Thursday that the railway ministry had asked it to share half the convenience fee that it charges on online ticket bookings.

The stock touched a low of Rs 650 apiece on Friday, but bounced back to close at Rs 845.65 apiece after the government rolled back its decision. The shares have lost a third of their value since touching a record high of Rs 1,278.60 apiece, after adjusting for a stock split, on October 19.

Analysts say the flip-flop could weigh on investor sentiment towards not only IRCTC but also other public-sector companies since it indicates weak corporate governance practices and inadequate safeguards for minority shareholders.

IRCTC Q2: Other highlights

1) Revenue from catering business jumped over four-fold to Rs 71.4 crore from Rs 17 crore a year earlier.

2) Rail Neer revenue rose to Rs 41.2 crore from Rs 9.2 crore a year earlier.

3) Revenue from internet ticketing unit climbed to Rs 265.3 crore from Rs 58.3 crore.

4) The tourism business brought in revenue or Rs 27.1 crore, up from Rs 3.9 crore a year ago.

5) IRCTC's EBITDA margin stood at 52.2% in the second quarter.

6) Total expenses doubled to Rs 207 crore from Rs 104 crore a year earlier.