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Informist, Tuesday, Feb. 11, 2025

By Rajesh Gajra

NEW DELHI – Indian Railway Catering and Tourism Corp Ltd. is not thinking of any hike in convenience fees in its web ticketing segment or basing it as a percentage of the ticket fare, its management said at a post-earnings call with investors Tuesday. The company will instead continue to focus on maximising ticket volume growth as well as non-convenience fee revenue to drive the overall revenue growth in the segment, they said.

The margin in the segment is already high at 84-85%, and "how much more margin you want to extract from a passenger," the management said in response to an analyst's question.

IRCTC's revenue from the internet ticketing segment increased 5.7% on year to INR 3.54 billion in the December quarter, accounting for 29% of the overall revenue. Of the segment's revenue, the convenience fee income accounted for 72% and increased 6.3% on year to INR 2.54 billion in the December quarter. The balance was in the form of non-convenience fee revenue which recorded an increase of 4.2% on year to INR 1 billion. The operating margin of the internet ticketing segment expanded to 84.7% in the December quarter from 83.0% a year ago.

The revenue from the non-fare and non-convenience fee based activities in the internet ticketing segment aided the earnings before interest, tax, depreciation, and amortisation margin expansion in the December quarter, the management said. Around 87% of all railway tickets booked in the December quarter were through IRCTC, and 125.1 million tickets were booked through the IRCTC platform in the December quarter against 114.8 million tickets in the year ago quarter.

The catering segment of the company, which contributed 45% of total revenue in the December quarter, saw margins contract due to closing down of nine base kitchens operated by the company, according to the management. This was on account of the new catering policy, they said. "We have now gone for licensing model, so there is a squeeze in the margin," the management said. In the December quarter, the catering segment revenue rose 9.3% on year to INR 5.55 billion, but the EBITDA margin contracted to 12.19% from 15.44% a year ago.

In the bottled water business under the brand name 'Rail neer', IRCTC is planning to start three additional plants in 2025-26 (Apr-Mar) which will add production capacity of around 150,000 bottles per day, the management said. In the December quarter, the company had added one Rail neer plant, they said. The revenue in Rail neer segment rose 15% on year to INR 964 million in the December quarter and the EBITDA margin for the segment expanded sharply to 12.3% from (-)3.8% a year ago.

The management said the tourism segment's revenue growth of 16.1% on year to INR 2.24 billion during the quarer was "remarkable". "This exceptional performance was driven by the operation of the luxury segment, that is Maharaja Express, state Teertha trains, and increased business in the Tejas Express," they said.

In the December quarter, IRCTC's net profit increased by 14% on year to INR 3.41 billion. The company's  revenue from operations increased by 10% on year to INR 12.25 billion. Sequentially, the net profit was up 11% while the revenue rose 15%.

On Tuesday, shares of the company ended at INR 750.95 on the NSE, down 2.9% from the previous close. End

Edited by Saji George Titus

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