Prabhudas Lilladher has issued a buy rating on IRCTC with a target price of ₹706 in its research report dated August 14, 2026. According to the brokerage's analysis, the stock is valued at 35x FY28E EPS with no change in the target multiple. The recommendation is based on decent growth prospects, debt-free balance sheet, and healthy return ratios.
IRCTC reported consolidated revenue from operations of ₹1,369.52 crore in Q1FY27, representing an 18% year-on-year growth from ₹1,165.61 crore in Q1FY26. However, consolidated profit after tax remained nearly flat at ₹330.16 crore compared to ₹331.86 crore in the previous year. On the standalone front, PAT increased to ₹329.86 crore from ₹303.45 crore in Q1FY26, showing strong operational performance despite margin pressures.
The company faced significant operational headwinds during Q1FY27, with EBITDA margin at 28.2% falling short of the brokerage's estimate of 33.4%. According to PL Capital, the margin compression was primarily driven by a one-time employee cost hit of ₹2 crore arising from gratuity and post-retirement benefits, input cost inflation, and a ₹1 crore maintenance charge dent within the ticketing division. Despite these challenges, revenue growth was supported by strong traction in the catering division.
Led by capacity expansion at Rail Neer (4 plants to be added) and healthy uptick in catering division, sales CAGR of 11% is expected over FY26-FY28E. The company is projected to achieve EBITDA margin of 30.9%/30.5% for FY27E/FY28E respectively, as share of lower yielding catering business rises. As reported by Prabhudas Lilladher, the stock currently trades at 28x/25x their FY27E/FY28E estimates.
Despite the positive analyst recommendation, IRCTC shares declined nearly 2% on Friday, reaching a low of ₹495.30 from the previous close of ₹504.45. The stock movement reflects investor concerns over the weak operational performance and margin pressures, despite the company's strong revenue growth trajectory and positive long-term growth prospects.
