Indian Railway Catering & Tourism Corp. Ltd. (IRCTC), the tourism and hospitality arm of Indian Railways, posted a net profit of Rs 82 crore in its Q1 earnings report. The firm made a profit of Rs 103 crore in the March quarter, compared to a loss of Rs 24 crore, a year earlier. Revenue from operations increased 85.4 per cent to Rs 243 crore as compared to Rs 131 crore reported in the first quarter in FY20.
In addition, the IRCTC’s board of directors accepted the proposal to split 1 share with a face value of Rs 10 into 5 equity shares with a face value of Rs 2. This is pending the Ministry of Railways’ clearance.
Stock splitting is a strategy that allows present shareholders to get extra shares of stock without diminishing the value of their stock. A stock split increases the number of shares in circulation while lowering the value of each individual share.
The company stated that the move was made to enhance the liquidity in the capital market, to widen the shareholder base and to make shares affordable even to small investors.
The stock rose about 3.6 per cent after the stock split decision was announced, from a low of Rs 2,605 in the morning session to hitting an all-time high of Rs 2,728.
The stock gained 4.57% during the normal trading hours with a trading volume of 06.068 million.
Catering income decreased 37% year-over-year to Rs 56 crore from Rs 89 crore reported in FY20.
Revenues from internet tickets increased by more than 300 per cent to Rs 149 crore, while tourist earnings more than quadrupled to Rs 7 crore.