IRCTC reported good profit numbers in the half-year ended in September 2019, with profits growing by 18 per cent over the same period last year to ₹172 crore. The surge in profits can be attributed to two main reasons.
One, the fillip to the profits of the internet ticketing segment (20 per cent of revenues) from service charges that were levied from September 1, 2019. Since the service charges are not required to be shared, unlike the erstwhile regime, margins from the internet ticketing segment skyrocketed. The segment reported a profit (PBT) margin of 74 per cent in 1HFY20, compared to 56 per cent in 1HFY19. Earnings from this segment more than doubled to ₹147 crore.
Two, the company adopted the lower tax rate of 25.17 per cent and hence the tax incidence (tax as a % of PBT) dropped to 28 per cent from 37 per cent in the corresponding period last year. Read More
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