IRCTC - Indian Railway Catering & Tourism Corporation Ltd Share Price

In the recent earnings call for Q1 FY26, IRCTC management provided an optimistic outlook for the upcoming quarters, emphasizing sustained growth and operational efficiency. The key financial highlights included a profit after tax (PAT) of INR 330.45 crores, marking a year-on-year growth of 7.14%, and an EBITDA of INR 397 crores, which reflects a year-on-year increase of 5.86%. Revenue from operations rose to INR 1,220 crores, up 4.36% from the previous year, driven chiefly by the Internet Ticketing and Tourism segments.

Major forward-looking points highlighted by the management include:

1. Tourism Growth: The Tourism segment showed impressive revenue growth of 21.3%, with plans to expand niche services through additional rakes for the Bharat Gaurav train and the Maharajas' Express. The management expressed confidence in capturing significant business opportunities in this segment moving forward.

2. Internet Ticketing Segment: The Internet Ticketing segment continued to be a significant revenue driver, contributing INR 360 crores to revenue, which represents a growth of 9.12% year-on-year. The segment's EBITDA margin improved to 84%.

3. New Initiatives: Management plans to enhance its non-ticketing revenue through the introduction of an OTA platform and pursue advertising opportunities leveraging artificial intelligence.

4. Catering Business: Although the Catering segment faced challenges, the management expects improvements as operational efficiencies are realized, especially with upcoming transitions in catering at upgraded Amrit Bharat Stations.

5. Future Capacity Expansion: In the Rail Neer segment, the company is moving ahead with the expansion of capacities and additional bottling plants to meet market demand.

The management confidently looks forward to maintaining this positive trajectory through enhanced operational strategies and market adaptability.

Major Questions and Answers from the Q&A Section:

1. Question by Jinesh Joshi: "Can you just call out what is the problem area over here? Because in an ideal scenario, growth in Catering should mimic the passenger traffic growth."

Answer: "Thank you, Jinesh. The decline in Catering is primarily due to a significant difference in election special revenues"”last year was INR32 crores; this year only INR4-5 crores. E-catering saw growth over 30%, but the transition to Amrit Bharat Station impacted static units and license fees. Future improvements are likely with this transition once completed."

2. Question by Jinesh Joshi (Follow-up): "How many stations or static units were impacted because of this transition?"

Answer: "We'll provide that figure later. The exact details regarding which stations were impacted are still being compiled. Please rest assured we'll get back to you with comprehensive information."

3. Question by Kartik Gada: "Can you provide the breakup of Internet Ticketing revenue into convenience fee and the other component?"

Answer: "Yes. Two-thirds of our Internet Ticketing revenue comes from convenience fees, and one-third from non-convenience fees. This structure supports our revenue model effectively."

4. Question by Harsh Yadav: "Could you provide an update on the total number of trains involved in onboarding catering services?"

Answer: "Currently, around 1,295 trains are involved and all units are managed through the tendering process to ensure consistency and quality in service delivery."

5. Question by Harsh Yadav (Follow-up): "Can you provide an update on the expansion timeline for the Rail Neer bottling plants?"

Answer: "Our Board approved expanding two major plants, and we have several others in the pipeline at various locations. We expect the tendering process to take about a year, so real expansion will follow thereafter."

6. Question by Rahul Jain: "Can you provide insights on new initiatives taken in the Tourism segment?"

Answer: "In Tourism, we've added another Bharat Gaurav rake this year and are running the Golden Chariot in partnership with Karnataka. We have several new circuits planned, and our bookings for Maharajas' Express are notably up over 20% from last year."

7. Question by Rahul Jain (Follow-up): "What is the timeline for monetizing the new payment aggregation approval?"

Answer: "We have received in-principle approval from RBI, and we need about 12 to 18 months to finalize all paperwork and begin monetization. We expect this will greatly enhance our service offerings beyond ticketing."

8. Question by Mohit Motwani: "Could you elaborate on the increased margins in the Internet Ticketing segment?"

Answer: "Certainly, the Internet Ticketing segment saw EBITDA margin improvements primarily due to increases in non-convenience fees and enhancements in operational efficiency. UPI usage also rose to 48.72%, which contributed positively to our margins."