Prabhudas Lilladher has downgraded Indian Railway Catering and Tourism Corporation (IRCTC) to 'Reduce' with a target price of Rs 822. The downgrade is based on the belief that growth in the internet ticketing division has plateaued and the rising share of low yielding UPI transactions will limit margin expansion. While the...
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catering division is performing well, it commands lower margins. Despite the strong performance in the catering division, the overall earnings surprise is expected to be limited. The company's sales and PAT are expected to grow at a CAGR of 11% and 12% respectively over FY24-FY26E. The recommendation is based on a multiple of 47.5x over FY26E EPS.