In early trading on Wednesday, shares of Indian Railway Catering and Tourism Corporation (IRCTC) fell 5% as the company's Q4 net profit only slightly increased, below market estimates.

On the Bombay shares Exchange (BSE), IRCTC's shares fell to a day's low of Rs 1,028; at 10:49 am, it was trading 4.46% down at Rs 1,034.40.

Why did IRCTC's stock drop today?

Even though revenue increased by 20% to Rs 1,154.8 crore, the bottom line and top line fell short of analysts' expectations.

Higher additional expenditures hurt IRCTC's performance, according to Jinesh Joshi, a research analyst at Prabhudas Lilladher, who spoke with Business Today. This led to a miss on both Profit After Tax (PAT) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).

With a price objective of Rs 825, the brokerage has kept the stock rated as hold.

"At now, the stock is trading at 66.1 times our estimated FY25E EPS. Joshi said, "We have a HOLD rating with a price objective of Rs 825.

Prabhudas Lilladher had projected that the business would generate a net profit of Rs 306.5 crore, which would have represented a year-over-year gain of 21.2% but a quarterly decrease of 2.5%.

The IRCTC board has declared a final dividend of Rs 4 per share for the financial year 2023–24, which is equivalent to 200% of the paid-up share capital and Rs 256 crore, notwithstanding the inconsistent performance.

IRCTC's EBITDA increased to Rs 402.96 crore in Q4, a 3.4% increase.

However, compared to the same time previous year, the EBITDA margin decreased to 34.89% from 36.8%. Remarkably, internet ticketing's share of total income dropped to 31% from 32.8% in FY23 and 37.1% in FY18.

The share price has decreased as a result of analysts' and investors' cautious outlook brought on by the financial performance and growing costs.