IRCTC Stuns Everyone With 386% Rise In Profits As Ticket Sales Surge; But Tax Expense Increased Too

Indian Railway Catering and Tourism Corporation (IRCTC) is a company of interest for many investors. Sheer authorized monopoly experienced by the company throughout the nation enables it to shun profit after profit each quarter. So, if a newbie in the world of investing and trading of the shares is notified that the quarterly profit of the company has risen by 386%, that person would be dumbfounded, wouldn’t he? But make no mistake the only reason for such a high jump is the low base that had occurred because of the pandemic.

IRCTC profit rises exponentially as compared to last year

In the quarter ended in September 2021, IRCTC’s net profit from continuing operations surged to ?158.5 crores, up 386%. The only plausible reason being given by the analysts is the low based on which it is being calculated. The company had reported a profit after tax of ?32.6 crore in the same quarter last year.

Along with the net profits, the company’s revenue from operations for the second quarter also surged 357% to ?405 crores as compared to ?88.5 crores YoY. At the same time, IRCTC’s internet ticketing segment witnessed a significant jump owing to the boost that was received by the digitization of the mass populace in the wake of pandemic induced lockdowns. The revenue from internet ticketing jumped to ?265 crores versus ?58.2 crore year-on-year. The catering revenue of the company also surged to ?71.4 crores from ?17 crores during the quarter under review. Other segments also registered massive growth in the July-September period as compared to last year.

IRCTC looks forward to better days on the horizon

“The company does not foresee any adverse impact on the supply chains as and when the business is resumed fully wherever the operations were curtailed or have remained suspended on account of the present pandemic,” IRCTC informed in an exchange filing.

As the company is the only entity authorized to manage catering services on trains and major static units at railway stations, it enjoys a strong monopoly. Recently, IRCTC shares turned ex-split when the board approved a 1:5 stock split. This will help the company enhance its liquidity in the capital market, widen its shareholder base and make the shares affordable to small investors.