Indian Railway Catering & Tourism Corporation Limited (IRCTC.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to IRCTC Q1 FY '26 Earnings Conference Call hosted by Dolat Capital Markets Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jain from Dolat Capital Markets Private Limited. Thank you, and over to you, sir.

Thank you, Nidhi. Good afternoon, everyone. On behalf of Dolat Capital, we welcome you all to the Q1 FY '26 Earnings Conference Call of IRCTC Limited. I take this opportunity to welcome the management of IRCTC represented by Mr. Sanjay Kumar Jain, who is CMD of the company; Mr. Sudhir Kumar, who is Director, Finance and CFO; and also, we have today with us Shri Rahul Himalian-ji, who is Director of Tourism and Marketing segment; and Mr. Manoj Sharma, who is Director of Catering Services of the company. And now I would like to hand the conference over to IRCTC management to take the proceedings forward. Over to you, sir.

Thank you, Rahul. Am I audible?

Yes, sir.

Good evening, everyone. And a warm welcome to the IRCTC Limited earnings call for the quarter ended June 30, 2025. Yesterday, our company has announced its financial results for the first quarter of financial year 2026, and these results have been disclosed on both stock exchanges. I will begin with a brief overview of Q1 FY '26 performance, following which our Director, Finance and CFO, Mr. Sudhir, will provide a detailed analysis of our business segment performance. Afterwards, we will open the floor for the question-and-answer session. I am pleased to report that Q1 FY '26 has been a stable and profitable quarter for the company with a PAT of INR 330 crores, reflecting a year-on-year growth of 7.14%. This performance is primarily driven by strong contributions from the Internet Ticketing, Rail Neer and Tourism segment. Our EBITDA for this quarter stood at INR 397 crores, up 5.86% year-on-year. It is driven by improved operational efficiency. Further, our EBITDA margin also expanded to 34.27% compared to 33.55% in Q1 FY '25, reflecting continued emphasis on cost optimization and better revenue mix management. Revenue from operations grew by around 4% year-on-year, reaching INR 1,160 crores. That is driven by continued growth in Tourism and Internet Ticketing segment. Overall, these results reflect our company's strong fundamentals, strategic focus and continued adaptability in a dynamic market environment. We are confident in sustaining this positive trajectory in the coming quarters, backed by operational excellence and a strong digital backbone. Now over to -- thank you very much. Now over to my Director of Finance, Mr. Sudhir.

Good evening, ladies and gentlemen. I wish good health and happiness to you and your family. I'm eager to share with you a brief overview of our quarterly performance. I will also compare it with quarterly performance on year-on-year basis. It will be followed by question-and-answer session. This year, we have recorded profit after tax of INR 330.45 crores in quarter 1. It is 7.14% higher on a year-on-year basis. Our revenue in first quarter has stood at INR 1,220 crores. It is 4.36% higher on year-on-year basis. Our EBITDA rose to INR 397 crores, which is 5.86% up on year-on-year basis. EBITDA margin is at 34.27% in first quarter of this year, underscoring our operating efficiency and prudent cost control measures. Now I come to segment-wise highlights. The first segment is Internet Ticketing. This segment continued to be solid revenue driver for the company. Revenue from this segment has stood at INR 360 crores, marking a 9.12% growth on year-on-year basis. 87.78% of total reserved tickets on Indian Railways are now booked through our portal. This segment is the most profitable. EBITDA of this segment in this quarter is 84%, which is better than that reported last year in the same quarter. Last year, it was 83%. Now I come to my next segment, that is Catering. Revenue from this segment has stood at INR 547 crores, which is slightly lower by 2.15% in comparison to last year in the same quarter. The EBITDA margin of this segment has also moderated to 13.1% in comparison to 13.9% last year on a year-on-year basis. Even though margins are relatively moderate compared to other segments, this segment is a reliable revenue stream with constant growth potential. Now I come to next segment, that is Rail Neer. Rail Neer segment has reported steady revenue growth of INR 106 crores. It is INR 1 crore less in comparison to same quarter previous year. EBITDA from this segment is also almost same, to be precise, INR 1 crore more than last year. Now I come to the last segment, that is Tourism. This segment has posted impressive revenue of INR 148 crores. It is 21.3% up on year-on-year basis. This growth is commendable, considering the fact that our business suffered setback due to geopolitical events. EBITDA margin of this segment has also improved in comparison to previous year. EBITDA margin of this segment was 7.6% last year in first quarter. It is 8.7% this year in the same period. Our performance of this quarter and growth initiatives undertaken by IRCTC reflect resilience, strategic discipline and operational efficiency, setting a strong foundation for remaining period of this financial year. This concludes my remarks. Now floor is open for question-and-answer session. Thank you.

[Operator Instructions] The first question is from the line of Jinesh Joshi from PL Capital.

Sir, my first question is on the decline in revenue in the Catering business. I believe we had multiple levers at play here like say, for instance, the rising count of Vande Bharat trains, tie-up with Swiggy and Zomato, expansion of business outside of railways and I guess the price hike was also helping us. But I think even in this quarter, like last quarter, the growth is a bit subdued. So 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. And if I look at your Internet Ticketing revenue, that is up by about 8%, 9%. But somehow that growth in Catering seems to be missing since the last 2 quarters. So your thoughts on that?

Yes. Thank you, Jinesh Joshi. I have to tell you that overall, our revenue increased by around 4% and our Tourism grew by 21% and IT business also grew by 9%. Our growth in Rail Neer remained flat and a slight dip in Catering, the reason being there was a temporary phenomena like we -- last year, same quarter, we ran election special and a sizable amount, around INR 32 crores worth of revenue generated from that business, whereas this year, it was only INR 4 crores to INR 5 crores. So that was the main reason we find about Catering. Otherwise, you see the eCatering part, eCatering, we grew by more than 30%. And in addition, we are in a transition phase whereby an opportunity through ABSS station, Amrit Bharat Station, where upgradation of stations are taking place. So the static unit on those stations could not generate license fee for this quarter. You can understand a little pain for a final relief. So ultimately, this ABSS station, once it is put in place, it is opening a very big door for IRCTC business, Catering business.

Understood. A follow-up on this part is that how many stations or rather static units were impacted because of this transition that you spoke of? And what was the lost revenue because of that, if you can specifically call out?

That figure we'll give you later. We'll send you across.

Sure. And sir, secondly, even on Rail Neer side, I believe all our 20 plants are operational. And ideally, we should have basically seen the benefit of improving utilization come through on that side. But even if I look at Rail Neer, the top line was more or less flat in this quarter as well, wherein in the earlier quarters, we have registered a good growth. So any specific reason that you may want to call out for this segment as well?

As you correctly pointed out, our utilization, in fact, has improved. Earlier last year, June 2024, our capacity utilization was 86.8%, whereas this quarter, it is 87.04%. But there were 2 issues. One is our Bilaspur plant. It is not working at the moment because of some issue with the state government regarding the extraction of water. So that -- in this quarter, we are hopeful to start it again. So first thing is that. Secondly, the election special, which we ran last year has a component of Rail Neer also. That is not there this time. And thirdly, we have introduced a new 500 mL bottle for Vande Bharat train. So you see that compared to the last quarter -- the last year quarter, June 2024, there were -- a number of Vande Bharat trains have been introduced in which we are giving only 500 mL bottles. So despite our utilization has improved, but effectively, because of 500 mL bottles, the revenue capturing is less.

Understood. Understood, sir. Just one last question from my side. If I look at our depreciation expense, it is relatively flat on a Q-o-Q basis. But if I remember right, I think in the last quarter, we capitalized our new office building worth INR 400 crores. So sequentially, the expense should have increased, but it continues to remain flat. So if you can just explain the reason behind it?

Actually, if you see the things, we -- our building has 2 parts. One part is land, as per the accounting standard, land has to -- land value has to be taken separately from the building part, from the construction part. And out of INR 400 crores, the major chunk of our amount of investment in this building is of land, which appreciates generally, doesn't depreciate. So we have capitalized only INR 40 crores of total investment and depreciation is counted on to that.

[Operator Instructions] The next question is from the line of Kartik Gada from Multipl Wealth.

Am I audible?

Yes, please continue.

Yes. So a couple of bookkeeping questions first. Can you provide the breakup of Internet Ticketing revenue into convenience fee and the other component, non-convenience?

Yes, sure. We -- actually, it is 2/3 of total IT revenue is convenience fee and 1/3 is non-convenience fee. You want a figure?

No, that's fine. I will -- that should be useful. That can be calculated. And similarly, can you provide a breakup of the -- like one is total tickets and the breakup of tickets booked, AC, non-AC sitting?

You see this quarter, we have booked 12.63 crores of ticket. And I think it is -- AC ticket of 6.4 crores, non-AC ticket is 4.74 crores.

Okay. Okay. The next question is, so there was a news recently about a rebate of 20% on holiday packages during the festive season. So just wanted to understand 2 parts here. One is about this rebate of 20%, who will be bearing that? Would it be railways, which is my guess? And second, here, would this be counted as one transaction only, both the onward journey and return journey? Or there would be 2 transactions which would be like neutral for the convenience fee component for us?

First of all, I must compliment Ministry of Railways for bringing this 20% discount in this festive season of Diwali and Chhath. And simultaneously, I must tell you, that we have no impact on our convenience fee because both -- we will be having 2 PNRs, one for onward journey, another is for return journey. And convenience fee, we'll be charging the same rate. So this will certainly add to our business because of running of many trains, but no impact on our revenue.

[Operator Instructions] The next question is from the line of Harsh Yadav from Dolat Capital.

Am I audible?

Yes, sir. You are.

Yes.

Okay. My question is regarding the Catering business. I wanted to get an update on the total number of trains that are equipped with onboarded catering services and also how many of them are managed via the tendering process?

All the units which we are working is through tendering process only, and this is around 1,300 trains, 1,295 is the number. And it changes every time a new train is introduced or new service is added to that.

All right. I had one more question regarding the Rail Neer business. So you had guided for adding 3 new bottling plants in FY '26 and increasing capacity to around 2 million bottles per day. I just wanted an update on this expansion time line. And also wanted to know if you have the number for the average volume of bottles sold per day in Q1.

Actually, we are only -- our Board of Directors already approved the expansion of our 2 major plants, one at Danapur and another at Ambernath. And there are a few plants in the pipeline at Prayagraj, at Ranchi, Bhagalpur, Mysuru. So we -- tendering process, we are already on to finalize the tender -- start the tendering process. And then it takes around a year and plus.

Okay. And also, do you have a number for the average volume of bottles sold per day in Q1?

Average number of bottles we sold per day is 14.12 lakh bottle per day.