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

Good day, and welcome to the IRCTC Q2 H1 FY '26 Earnings Call hosted by Dolat Capital. [Operator Instructions] I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and over to you, sir.

Thank you, [ Huda. ] Good afternoon, everyone. On behalf of Dolat Capital, we welcome you all to the Q2 FY '26 Earnings Conference Call of IRCTC Limited. I take this opportunity to welcome the management of IRCTC, which is 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 for Tourism and Marketing; and Mr. Manoj Sharma, Director for Catering Services of the company. And now I would like to hand the conference over to IRCTC management to take the proceeding forward. Over to you, please, Sanjay-ji.

Thank you, Rahul-ji. Good afternoon, everyone, and a warm welcome to the IRCTC Limited earnings call for the quarter ended September 30, 2025. The company announced its financial results for the second quarter of financial year '25-'26 yesterday, and the same have been filed with both stock exchanges. I will begin with a brief overview of our quarterly performance, after which our Director of Finance and CFO, Mr. Sudhir Kumar, will take you through the detailed financial and segment-wise analysis. We will then open the floor for questions. We are pleased to share that Q2 FY '26 has been a stable and profitable quarter for IRCTC, underscoring our strong operational fundamentals and sustained business momentum. The company reported a profit after tax of INR 342 crores, reflecting a year-on-year growth of 11.04%. This growth was primarily driven by robust performance in our Internet ticketing, catering and tourism segment, supported by operational efficiency and disciplined cost management. EBITDA for the quarter stood at INR 404 crores, an increase of 8.31% year-on-year with an EBITDA margin of 35.25% compared to 35.05% in Q2 FY '25. The improvement in margins demonstrates our continued focus on cost optimization, operational excellence and revenue diversification. Revenue from operations for Q2 FY '26 stood at INR 1,146 crores, up by 7.71% from INR 1,064 crores in the corresponding quarter of the previous year. This growth was broad-based across all business segments, reflecting steady demand recovery and our ongoing efforts to enhance service delivery and digital capabilities. We believe that IRCTC's consistent performance reflects its resilient business model, strong brand equity and customer-centric approach. Our strategy remains focused on strengthening our digital ecosystem and expanding new age offerings, enhancing operational efficiency across business verticals, leveraging technology for better customer experience and scalability and exploring emerging opportunities in tourism, hospitality and value-added services. Looking ahead, we remain confident of sustaining our business growth trajectory in the coming quarters, supported by our strong financial strength, efficient operations and commitment to delivering long-term value for all stakeholders. Thank you very much. I will now hand over the call to Mr. Sudhir Kumar, Director-Finance and CFO, for a detailed discussion on our financial and segmental performance. Thank you.

Good afternoon, ladies and gentlemen. I hope you and your families are in good health and high spirit. I'm pleased to share with you a brief overview of IRCTC's financial and operational performance for the second quarter of financial year 2025-'26, along with a comparison on a year-on-year basis. This will be followed by a question-and-answer session. During the quarter, profit after tax stood at INR 342 crores, reflecting a year-on-year growth of 11%. Our total revenue for the quarter stood at INR 1,209 crores, which is 7.5% more than corresponding period of previous year. EBITDA for the quarter rose to INR 404 crores, a 8.31% year-on-year increase. EBITDA margin also improved to 35.25% in comparison to 35.05% previous year. Improvement of EBITDA demonstrates IRCTC's successful cost management and operational efficiency. Now I come to segment-wise highlights. Internet Ticketing. Internet Ticketing segment continued to be a strong revenue and profit driver for the company. Revenue from this segment stood at INR 386 crores, marking a 4% growth on year-on-year basis. This growth clearly proves the IRCTC leadership in digital marketing. Currently, 89.24% of total reserve tickets of Indian Railways are booked through our online platform. This segment is the most profitable with EBITDA margin of 85%. And if we compare to last year, it was 81%, and it clearly reflects our improvement in efficiency. Catering. Revenue from Catering segment stood at INR 520 crores, showing an 8% increase on a year-on-year basis. The EBITDA margin for this segment remained broadly stable at 13% compared to the same previous year. Catering continued to be a steady and dependable revenue stream with consistent growth potential. It is further supported by growing passenger volume and customer-centric service initiatives. Now I come to Rail Neer. Rail Neer segment reported revenue of INR 91 crores, representing a 4.6% growth on a year-on-year basis. EBITDA margin of this segment remained stable at around 10%, similar to last year same quarter and reflecting sustained operational efficiency and strong brand acceptance. Now I come to Touring. The Touring segment has delivered a very robust performance with a revenue of INR 150 crores. It is 20.97% up year-on-year basis. This growth is particularly noteworthy given the temporary disruptions caused by geopolitical factors during this period. The EBITDA margin of this segment further improved to around 7% as against a negative margin in the same quarter in previous year, reflecting successful cost rationalization efforts and better business mix. Overall, the second quarter performance reflects IRCTC resilience, strategic focus and operational excellence. The company's diversified business model, a strong digital backbone and disciplined execution continue to position it well for sustained growth in coming quarters. Now I conclude my remarks. Now we will now open the floor for question-and-answer session, please.

[Operator Instructions] The first question is from the line of Sucrit Patil from Eyesight.

I have 2 forward-looking questions. The first question is looking beyond the quarter numbers, what is the bigger plan for IRCTC as digital platform, tourism and catering evolves, how are you planning to build a lasting edge beyond just ticketing growth or catering contracts? Is there something deeper that the company is planning that will make your competitors hard to copy your model? That's my first question. I'll ask the second question later on.

Thank you, Mr. Patil. I'm happy to tell you about our bigger picture. You see, we are already making our road for 2 major activities. One is our payment aggregator business. We have already got in principle approval from RBI on 4th of August, and we have been given some time to submit our proposal application for license, acquiring license finally. So that way, we'll be able to submit, say, in the month of -- by the end of January. And the second -- and this business appears to me as a future -- one of the future leading business for IRCTC. The other big plan for IRCTC is besides this normal business is unified travel portal. Here, we are aspiring to like give a travel solution through a unified portal. And by making this portal, we aspire to cross-sell the products to our existing customers and to the additional customers. So here, we will improve our UI/UX, we'll use AI/ML and agentic AI. And we will facilitate the passengers. We will make their experience very nice, and that's our plan.

My second question is in regards to margin and cost planning. When cost rises, whether it is catering imports or IT investments or any compliance issues, how do you make sure the margins stay ahead without slowing down growth? Is there any system that you have built or you will be building which will help you keep the profits in line even when things are getting a bit -- you cannot foresee certain things coming in the future. I want to hear your view on this.

You see in that scenario, you have only 2 ways to do these things. First is you increase your price or you increase your volume. So we believe in increasing our volume because in most of the sectors, we are known for our delivery at affordable prices, be it our tourism product, be it our catering products, all our products are designed to gain from the volume and not from the hiking the price. Like we are selling at INR 15 Rail Neer. We are selling like catering meal -- full meals at INR 80. So all these things are affordable prices and getting volume. Thank you very much.

The next question is from the line of Jinesh Joshi from PL Capital.

Sir, I believe prepaid catering is now available in the Amrit Bharat train. So what this 7% growth in catering that we saw attributable to that? And also, if you can clarify whether all Amrit Bharat trains will operate on that prepaid model or not? And how many trains are we currently servicing right now?

You want to know how many Amrit Bharat trains we are serving now or you want to know overall trains we are serving?

Currently, how many are we serving? And if you can also tell us what can be the universe over here?

So whole universe today, it is 1,318 trains. And out of which around 15 Amrit Bharat trains we are serving. At the moment, none of the Amrit Bharat trains we are running on prepaid model. But yes, the policy is out. Of course, this will give us a good gain, but we are putting our system in place to take up this work.

So if I remember right, earlier our universe was somewhere around 1,500 trains and our reach was at about 1,300 trains. And now you mentioned that additional 1,318 Amrit Bharat trains will come up. So does that imply that our universe doubles or basically, how to think about it? Because -- yes...

I could not get your question. Please repeat it again.

Sir, our current catering reach is 1,300 trains, right?

Sure.

Right. And you mentioned that additional 1,318 Amrit Bharat trains are something which will come up in the future. So does it include...

No, no, no. Currently, we are running -- currently, all trains put together mobile services we are providing in 1,318 trains. And only 15 trains are Amrit Bharat trains.

Understood. Understood. And how many more Amrit Bharat are about to come was my question. How big is the universe?

Though universe is quite big, but exact number, you can get only from Ministry of Railways.

Okay. And secondly, just one small clarification required on the cluster-based contracts that were awarded some time back on 5 plus 2-year basis. So these new contracts, I mean, are all of them now hitting our P&L and we are accruing revenues at revised prices or some of them are yet to hit our P&L?

No, you see there is a mix of cluster trains and SVD trains and temporary trains. You see, we have given contract on cluster trains, which have been already awarded where we got the tender through. And in those trains also, when the SVD trains' tenure will expire, those trains will be converted into cluster trains. And there are certain trains which could not be pooled in the cluster, those trains we are running on a temporary basis. So all 3 types of trains are still working.

I will take this separately. No problem. But sir, one last bookkeeping question. If you can share the number of tickets booked for the quarter and the convenience fee and also the share of UPI transactions.

Yes. Total tickets during this quarter booked is INR 13.55 crores. and UPI share is 49.81%. And convenience fee share is INR 252 crores.

[Operator Instructions] The next question is from the line of Rahul Jain from Dolat Capital.

Just I would like to understand about this exceptional item, which has been announced in this particular quarter related to the Tejas Express train. Is it -- if my memory serves right, is it related to the reduction request that we have made towards certain charges for running the rake? Please give me clarity on this same. And is there anything more to happen here?

Yes, this exceptional item is because of the discount we got from Indian Railways on the haulage charges of Tejas Express, which is INR 5.8 crores. What's your next question on to that?

Yes. So -- and this haulage charge now since this has been aligned, so the reduced rate is what is applicable to us for the current fiscal onwards?

Yes, yes. The same rate is continuing now.

And any color we could get on this Tejas Express? Is it making profit at this point? And any utilization? Any other input that we could share how the operations are working right now?

Yes. It worked with total Tejas revenue is INR 37.31 crores, out of this INR 3.38 crores is our profit. And our occupancy of Ahmedabad is 87% and Lucknow is 56%.

Okay. Now about the railway business, we have highlighted that we would first close the already announced plant. So any development in terms of what all new capacity we are expecting to getting live in next 12 months?

Yes. We -- first of all, our Bilaspur plant, which is not working at the moment because of some reasons of the state government. So now the issue is resolved, and we will be very soon starting the Bilaspur plant. So that will add capacity of 72,000 bottles per day. Besides, we are in the process of enhancing the capacity of our Danapur and Ambernath plant from 1 lakh bottles to 3 lakh bottles. And we are also hoping to install 4 more plants across India.

Is it safer to assume this brownfield capacity can come in next 12 months, but the 4 more plants might come probably in the next fiscal?

Yes, yes.

Sure. And on the tourism business, we keep innovating in terms of new revenue stream and opportunity. So is there any other thing that we are working right now or any smaller initiative that has taken up scale within the tourism subsegments?

I'm happy to inform you that we have started taking up MICE events. And recently, we have done it in -- for Indo-ASEAN countries, this Mart where IRCTC in Bangkok for the first time, organized the Mart infrastructure. We participated in PATA. And we have been given by MEA this work, not to Ministry of Tourism.

Sorry, we got it from where?