IRCTC - Indian Railway Catering & Tourism Corporation Ltd Share Price

Management's outlook for IRCTC remains positive, emphasizing sustained growth driven by key segments. Key highlights:

1. Revenue Growth: Catering (+15% QoQ, +9% YoY) and Tourism (+80% QoQ, +16% YoY) segments led performance. Rail Neer revenue rose 7% QoQ (16% YoY), with plans to expand capacity by 200,000 bottles/day in FY26.

2. Margins: Internet Ticketing margins improved to 84.71% due to non-convenience fee income. Tourism margins (16.94%) are expected to sustain/rise with luxury trains (Maharaja Express, Golden Chariot) and Bharat Gaurav tourist trains. Catering margins dipped (12.19% vs 15.44% YoY) due to transition to licensing models but may recover with new train launches.

3. Strategic Initiatives:

   • E-Catering: Surged to 102,561 meals/day (vs 47,000 in Q2).
   • Tourism: Targeting premium offerings (e.g., Maharaja Express revenue up to Rs.95 crore annually).
   • Payment Aggregator License: Awaiting RBI approval; potential to expand in govt transactions.
   • Rail Neer: Capacity expansion underway (current 1.84M bottles/day).

4. Internet Ticketing: Near saturation (87% bookings via IRCTC) but volume growth expected from railway expansion (e.g., Vande Bharat sleeper trains).

5. Events: Kumbh Mela boosted tourism (8 Bharat Gaurav trains, sold-out tent city) and ancillary revenues.

Outlook: Focus on operational efficiency, scaling non-convenience revenue, and leveraging infrastructure (new Catering kitchens, Rail Neer plants) to sustain growth. Margins to stabilize with volume-driven strategies.

Question: How will the launch of Swa Rail impact IRCTC's business? Will IRCTC have to share convenience fee revenue with CRIS?

Answer: The Swa Rail app will not affect IRCTC's convenience fee revenue, as bookings via the app will still route through IRCTC's systems. No revenue sharing with CRIS is required, and IRCTC retains all convenience fees.

Question: What is the progress of IRCTC's e-Catering partnership with Swiggy/Zomato, and what is its revenue contribution?

Answer: e-Catering grew to 102,561 meals/day in Q3FY25 (vs. 61,522 YoY), contributing INR 15 crores in quarterly revenue. Expansion continues across stations, with strong growth in orders.

Question: Are Catering margins declining due to license fee terms tied to tariff hikes?

Answer: License fees for ongoing contracts remain unaffected by tariff revisions, as tenders already account for such changes. Margins are impacted by transitioning from departmental kitchens to licensing models but will improve with scale and infrastructure upgrades.

Question: Why did Internet Ticketing margins improve despite a 5% QoQ revenue decline?

Answer: Margins rose to 84.71% due to higher non-convenience fee revenue (INR 101 crores vs. INR 96 crores YoY) and operational efficiency. Growth in absolute ticket volumes (12.51 crore tickets in Q3) also supported profitability.

Question: Is Tourism's strong Q3 performance (80% QoQ growth) sustainable?

Answer: Yes, driven by luxury trains (Maharaja Express, Golden Chariot), Tejas Express, and Bharat Gaurav trains. Margins (~30% for luxury trains) are expected to sustain or improve with rising demand and expanded offerings.

Question: What is the status of IRCTC's payment aggregator license?

Answer: IRCTC applied for RBI approval in December 2024 and expects in-principle clearance soon. The license will enable expansion into government payment segments (freight, GeM), leveraging IRCTC's existing transaction dominance (20-22% share).

Question: How will reduced advance booking windows (4 to 2 months) impact convenience fee revenue?

Answer: No material impact, as convenience fees are charged only during booking, not cancellations. Growth will rely on increased train capacity and passenger volumes from railway infrastructure expansion.

Question: What explains Rail Neer's improved EBITDA (32% QoQ growth)?

Answer: Higher production capacity (18.4 lakh bottles/day) and new plants (e.g., Vijayawada). Margins stabilized at 12.84% with better utilization. Three new plants (2 lakh bottles/day capacity) are planned for FY26.

Question: Why hasn't IRCTC linked convenience fees to ticket prices (percentage-based)?

Answer: IRCTC prioritizes volume growth over rate hikes, given the price-sensitive market. Current high margins (84-85%) and rising ticket volumes (13.59 lakh/day in Q3) drive absolute revenue growth.

Question: What drove Catering's 15% QoQ revenue growth despite margin dip?

Answer: Increased train services (e.g., Vande Bharat, Amrit Bharat) and e-Catering expansion. Margins dipped temporarily due to licensing model transitions but will recover with infrastructure scaling.