IRCTC Q4FY20 Results: Revenue down by 18% and Net Profit down by 27%. Will the share price go for correction?

The IRCTC Q4FY20 results were announced on 10th July 2020. These are already delayed and investors and the market was expecting this much before. The company has submitted their Financial Statements and Audited Reports to the exchanges on Friday, 10th July 2020 after the market hours.

The share traded upwards on Friday on the positive news of the company participating and bidding in the privatization of the railway project. On thursday it closed at Rs. 1,385. On Friday it opened at Rs. 1,375 and rose as high as Rs. 1,431.30 during the day, thereby giving an increase of 3.34% on the previous close. And by the evening it settled down and closed at Rs. 1,399.45 on the NSE and still giving a return of 1.04% on the previous close.

Now since the results are announced after the market hours, the big question in the minds of the investors is, will the company sustain its current share price of Rs. 1,399.45??

The following table shows the analysis of the results:

Let us first analyze the results of FY2020 Vs. FY2019 (YOY - Year On Year basis):
  • Both the year accounts are audited (obviously).
  • Revenue has gone up by 21.68%.
  • Expenditure has gone up by 6.03%.
  • Finance Costs have gone up by 209.36%.
  • Profit before Depreciation and Taxes (PBDT) is gone up by 66.91%.
  • Net Profit has gone up by 71.30%.
  • EPS has increased by 71.30%.
  • Operating Profit Margin (OPM) is gone up by 9.34%.
  • Net Profit Margin (NPM) is gone up by 6.37%.
So the year on results for FY20 Vs. FY19 are very positive and encouraging. However, the impact of this performance is already reflected in the share price till date. Moreover, the Q3FY20 results were even more encouraging.

Now, let us analyze the results of Q4FY20 Vs. Q3FY19 (YOY - Year On Year basis):
  • Q4FY20 accounts are audited whereas Q3FY20 accounts are unaudited.
  • Revenue has gone down by 18.03%.
  • Expenditure has gone down by 14.27%.
  • Finance Costs have gone up by 44.22%.
  • Profit before Depreciation and Taxes (PBDT) is gone down by 22.54%.
  • Net Profit has gone down by 26.82%.
  • EPS has decreased by 26.82%.
  • Operating Profit Margin (OPM) is gone down by 2.17%.
  • Net Profit Margin (NPM) is gone up by 3.08%.

So the Q4FY20 results are very very poor. Yes, everybody knows that almost all industries are affected by lockdowns for the Coronavirus pandemic. The markets and investors are also waiting for the Q1FY21 results. They are also due. The management has already said that the Q1 and Q2 results of FY21 will also be impacted by the lockdowns. Some positive performance can be visible (hope everything becomes normal) only from the Q3FY20. I don’t think the current price of Rs. 1,399.45 of IRCTC discounts the effects of the above dismal performance of Q3FY20. In the final analysis I am of this strong view that the share price of IRCTC shall go for some deep correction in the near future. Let’s wait and watch!!

Post a Comment