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Informist, Thursday, Aug. 13, 2026

 

--IRCTC: Margins hit due to changes in revenue mix 

--CONTEXT: Comments by IRCTC management in post-earnings call with analysts 

--IRCTC: Ex-chair Sanjay Jain quit solely due to personal reasons 

--IRCTC: Complaint ratio for food services around 0.0008% 

--IRCTC: Catering contributed to 54% of Q1 revenues 

--IRCTC: Submitted final application for payment aggregator license to RBI 

--IRCTC: Expect payment aggregator license from RBI by end of FY27 

--IRCTC: Will try to maintain catering margins at around 10% going ahead 

--IRCTC: Input costs rose on W Asia crisis, hit profitability in Q1

 

By Kabir Sharma and Shruti Nair

 

MUMBAI – Indian Railway Catering and Tourism Corp.'s margins in the June quarter were hit by a change in revenue mix, higher human resource costs, and increased input costs, the company's management said in a post-earnings call with analysts.

 

"...there is a slight decline in the margins due to changes in revenue mix, particularly higher contribution from catering," the company's finance director and chief financial officer Rajneesh Narayan said. He also cited additional employee costs of around INR 200 million and higher direct costs in the internet ticketing segment.

 

IRCTC's revenue from operations rose 18.1% on year to INR 13.70 billion in the quarter, while EBITDA declined 2.77% to INR 3.86 billion. Catering revenue rose 33.82% on year to INR 7.32 billion and accounted for around 54% of the company's total revenue during the quarter.

 

The company said the higher contribution from catering, which traditionally carries lower margins than internet ticketing, weighed on the overall margin profile. IRCTC's management said it would try to maintain catering margins at around 10% going ahead. Catering margins were 9.29% in the first quarter, compared with 10.42% in FY26. The decline was partly due to a proof-of-concept initiative on select trains, which cost the company more than INR 40 million during the quarter, as well as higher gratuity and employee-related costs.

 

"Traditionally" catering margins have been between 10% and 12%, the management said, adding that it would seek to maintain margins around those levels as passenger numbers and the number of trains increase.

 

The company also said input cost pressures linked to the West Asia crisis affected profitability in its Rail Neer business. The cost of resin and other materials increased as petroleum product prices rose, with material costs climbing to INR 610 million from INR 550 million, leading to a decline in margins.

 

PAYMENT AGGREGATOR LICENCE

IRCTC said it has submitted its final application to the Reserve Bank of India for a payment aggregator licence. The company had received in-principle approval from the RBI and submitted its final application on Aug. 4, along with the required system audit report and minimum viable product feasibility report. The management expects the RBI to respond during the current financial year and said it expects to receive the payment aggregator licence by the end of it.

 

Once the licence is secured, IRCTC plans to expand its payment business across its own ecosystem and potentially offer payment services for railway passenger and freight-related services, government platforms and the private market.

 

On the resignation of former chairman and managing director Sanjay Jain, the management said the decision was solely for personal reasons and assured stakeholders that there were no organisational concerns behind his departure. "This was a completely personal decision," the company's current MD Rahul Himalian said, adding that IRCTC would continue to grow stronger and that Jain could continue to support the company from outside in whatever capacity he could.

 

FOOD COMPLAINTS

IRCTC said the complaint ratio for its food services is around 0.0008%, based on roughly 1.8 million meals supplied daily. The management said around 300-500 complaints are logged each day, although some relate to customer preferences or suggestions rather than actual service deficiencies.

 

The company serves around 580 million meals annually and said it is focused on improving food quality and passenger experience, including through e-catering, e-pantry and the potential introduction of branded players into the catering ecosystem. IRCTC reported a first-quarter profit after tax of INR 3.30 billion, while total revenue increased to INR 13.70 billion from INR 11.60 billion a year earlier.

 

On Thursday, Indian Railway Catering and Tourism Corp.'s shares closed at INR 504.45 on the NSE, down 1.8% over Wednesday.  End

 

Edited by Avishek Dutta

 

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