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

Hello, am I audible?

Yes. Can you hear me?

Yes. Am I audible?

Yes, you are audible. I can hear you.

Okay. Others are waiting? Or I'm in...

No, no. It's you and me. Let me -- yes, let me give you a quick introduction of what it is that we do because I do not think we have met before. So Wellington Management is -- we are Boston-based. We have about $1.3 trillion under management. And we are quite involved in Asian as well as Indian equities as well. We have been present in Asia since the '90s. And I work as part of the emerging markets book of business where my specialization is in all consumer names. So I have been in the industry for about 20 years now, and I've been looking at India for probably 17 of those 20 years. So IRCTC is actually one of the rare companies that we had actually not spent too much time looking at, but given the cap has become quite reasonable, we did a deep dive into it, and that was the reason I wanted to do the call just to get a sense of sort of follow-ups following the work we have done.

Please go ahead.

Yes. So if you're okay with it, we can just do this as question-and-answer, and then it would be great to get your thoughts on some of the -- more of the questions we had was on growth. And I know that we have some new areas of growth which are quite exciting. I wanted to explore some of those and also go into some of our core businesses in ticketing and catering.

Okay.

Yes. So I've read pretty much all your conference -- con call transcripts -- I think someone is coming in.

Right, right. He is from our IT center. I mean this is regarding some, what you said, the ticketing and especially some data regarding the payments and all that. So he will be answering. Please go ahead.

Okay. So the question that I had is we have given different areas of growth for different segments. But if I were to keep all that aside and to just ask you the question of, in the next 3 to 5 years, which of the growth areas for our top line do we think will be the most impactful? What would those be?

See, this is -- our business is passenger-oriented. And in fact, whatever the passengers or the services which we can provide, we'll increase, so that will impact our -- I mean, this is the top line also. So starting from this, India is a very vast country. And at the moment, we are not able to provide the traveling facility to our public because we have our shortage, I mean, in infrastructure. Now what is happening, that the freight and, what you say, the passenger trains run on the same track. According to -- but due to that, they are congested also, number one. And number two, the more number of trains, just the passenger -- traffic also runs at a very slow speed. Now to such a vast country, the government had decided to have one more organization which will be only for the freight traffic and, therefore, a [ parlor ] network of the railway track reroute is being constructed by dedicated freight corridor. That means the chunk of, a major chunk of, the freight traffic will move on that. And therefore, the spare capacity, the line capacity, will be much more to run more trains, number one. Number two, as of now, the -- whatever the, what you say, trend of the population, and that also the large market force and the traveling public, for whatever reason, I mean, maybe they're business reasons, employment reasons, the holidays, the festivals or the leisure or the personal obligations, so more is getting confirmed ticket. I mean, so much of the passengers are there. So once they will move, still, there will be always a shortage. I mean this -- we cannot satisfy to the all regarding the confirmed tickets. But yes, according to our perspective, according to IRCTC, the number of passengers will increase because the government is in a spree of introducing new trains, provided very aligned capacity. So the moment there is some capacity, the government introduce some new trains. Our production capacity, if you see the production, what you say which we can say, the loco and coach manufacturing, that has -- going very high, I mean as per the -- setting all type of records. And the moment it is, what you say, the coach and the engines and the loco are ready, then new introduction of some new trains is taking place. And in the same place that this is being monitored by dedicated freight corridor, even monitored by the highest [ quarter ], I mean the highest [ government ministry ]. So every week, there is some, what you say, monitoring. And it is -- what you say, the progress is very -- at a fast pace. So what we see in near future, that more number of freight traffic once it is transferred to the dedicated freight corridor online -- this line, so there will be more spare capacities, the more coaches, the more, what you say, locos, so the more -- as you see, this [ one ] serve as an extended arm of the Indian Railways. So in all the 3 sectors, whatever -- for the ticketing, of course, we have the lion's share of the Internet ticketing because of the digital payment system. So this is where the convenience fees will go, number one. Number two, the catering, that will be the menu, of course, the packaged Rail Neer water. So all the 3 will increase. So therefore, I see in this that, in the near future, it will keep on increasing. I mean, it is very difficult to say any fixed percentage. But yes, I'm confident, more than 10%, 12%, 13%, something like that, will be there. So that, I see in the near future that -- because whatever the number of population, which is kind of workforce, and the more number of factories, the more number of service industries, the more number of employment and the traveling public and the business traveling, so -- and of course, India is such a vast country, there's -- festivals are an important place, which is unheard of in other countries. Because this is seasonal, I mean 2 to 3 seasons are such that there's only -- the people are really traveling, maybe for social reasons, marriage, then also, what you say, the festivals. So I see at a very -- I mean, what you say, a strong growth in the economy, then the land capacity of this, what you say, a good track, and then the more number of trains in production and then, of course, which is -- will translate into all the 3: the ticketing, then catering and then this Rail Neer, that is the packaged water, our brand.

That's very helpful. Can we take a step back and could you give me some idea of what are -- how many trains we are serving right now, what that is as a percentage of a number of trains we can serve today, so that we can have an understanding of how many more trains can be added to that, just so that I have an idea.

Okay. Okay. I'll give you an idea, just a minute. This is -- around 1,200 trains in the post-COVID -- we are interested -- remember, we are interested in the trains where, what you say, the confirmed tickets are there. The number of trains aren't much, but there -- it's not of much interest to us. Well, confirmed tickets are there, number one. Number two, their sticker -- those trains, which have at least one major meal -- suppose that trains may start at 11:00 in the night, in the night 11:00, and will end, let's say, around 6:00 or 7:00, I mean, in the morning. So there were meals. Again, so we lose on this catering in the railway. So therefore, there are no service provider is ready to come because what they will do? Hardly even -- not even 5% of the passengers will take any meals because they've already packed and all that. So that is there. But of course, as I told you, that this will keep on increasing because the biggest travelers and all that, they want -- I mean around 900, let's say. And total number of trains post-COVID as of now is 1,200. So 300, I mean, they've built up just after the COVID, so we have added up. So this will be -- increasing trains because as well, the number of the population and then the spread of the country and then the traveling public and then for sure, many Indians are traveling with that, so that will keep on increasing.

No. I think I agree with you. I mean I have -- when I used to live in India, I was quite a frequent user of Indian Railways myself. So I'm quite aware of how important it is, especially to the middle-class life. So I think I can totally see that. So 1,200 trains is the number of trains where we have contracts today?

It's a pair of trains, 1,200.

Meaning back and forth.

Up and down, a pair, going and coming. So you can multiply by 2, in a way. I mean, because -- right, yes.

So no, my question was 1,200 is the number of routes that we are today catering to. Is that right?

Yes. And I learned more things regard -- on the platforms, I mean, all the stations, there are -- of course, there are more than 7,000 stations out there, railway stations out there. But...

Mr. Kumar, I lost you. I can't hear you.

Hello, am I clear now?

I can hear you now.

Am I clear now?

Yes, but we lost you. You mentioned there are a number of stations, and then we lost you.

Number of stations -- roughly around 7,000 are the number of stations but, of course, including all the stations: small, big, medium, but...

You can't hear him also, right?

Am I not clear?

We lost you again, sorry. You just said 7,000 is the total stations, small and big, everything, put together. And then we lost you.

Now see if I'm audible clearly. Okay. Okay. Now just I was repeating that there are, of course, around more than 7,000 stations in the railways. But of course, many are small stations inside the system, you'll not bother regarding this. Some of the -- I mean, the major stations and the medium, what you say, stations, we cater to that because our station is market-driven -- I mean, whatever the food franchise is there, so that is market-driven. So I mean if all the prices are -- as per the international standard, brands are there. So of course, the more facilities are there. So not only -- there are 2 different types of, what you say, the catering. One is, of course, mobile catering. What I told, around 1,200 is the number of pair of trains there. But then apart from that, static units, what we call static, [indiscernible] static on the platform. So there also we cater to it. And of course, obviously, they're market-driven, so which are now -- with the increasing, what you said, spending public, so they want to have the -- enjoy the facilities, executive lounge, suppose. Because they have to work in the stations, they can work, I mean simple, under a fine -- under a seat. But then no, they want to have an executive lounge. So that is another thing. Refreshment rooms are there, the same tea, coffee at the stations, at the stores, maybe at a very small price. But then -- and if you go in the refreshment, there's a food plaza. So I mean all facilities will be there. The AC will be there. Bars will be there. Some more amenities will be there. So something like that. There's some more amenities that will go there, so something like that. So this will also be increasing. So of course, I mean, this is not catered to very, I mean, small -- I would just tell you around 530 are the operational food plazas, retiring rooms, executive lounge. So these are -- so out of 7,000 stations, there are maybe -- on one station, maybe there are 2 or so there. So we -- so this is the market-driven, so therefore, we cannot open everywhere. There has to be a license fee. So that is another one.

So the other thing is, in our conference calls, we have made it very clear that we sign the contract with each train route, correct? So if you have like a coach in Bangalore train route, IRCTC will have a contract with that train route, which will be different from the Mumbai-Delhi train route. So my question was how many contracts do we think are still there that we could potentially sign amongst the trains that, like you said, we can consider a part of our opportunity set. So maybe coach into Bangalore we won't sign because it's a small route, and we are not interested. So I'm just trying to see...

At least you want to see how many number of trains Indian Railways is running, 3 cavaliers, 11,000...

No, no, no. Not that, sir. I'm not interested in trains where, like you said, which is a small route, 4 out of 5, maybe we are not interested, where there's no Internet, right? So my question was, we have said that we have 1,200 train routes that we are currently catering to. All of those, obviously, will have at least one meal in that train route, right? So I'm trying to say how many more train routes are there where we also have one meal at least, which we are not currently catering to? Is that there at all?

Just a minute. Around 470 are the -- I mean, train side vending we have. Train side vending, I will just clear the concept. We don't have a pantry car in that. I mean there's a separate [ kitchen out ] there. But en route the stations, en route the stations, one of the -- one which is authorized, who have got the license, he takes the order and then he also just gives and transmits it well in advance to, let's say, after 3 to 4 hours, the station which is coming. And from there, the meals are picked up from the base stations and to the -- I mean, distributed to the passenger.

That is like -- is that the same as e-catering?

No, no, no. E-catering is slightly different. E-catering around [indiscernible], the highest it was there probably 66,000, the e-catering, the meals were there. That, we are dealing on the mobile app. I mean, they are free, but that is for each and every -- what you say, for each and every train, it is possible, provided the service provider with the brands at the next stations is available. But these are the TSVs. Train side vending is there. The entire route, only that route is eatable. No pantry car is there. But where one was -- someone is authorized, so he takes the order in the train and then gives, transmits it well in advance to the next class, at 3 to 4 hours, whatever the station will be coming. And then, accordingly, as per the menu criteria and all the -- whatever he has booked, the food, it is -- have been loaded and then gets distributed. So I think there are 3 things I want to make clear: one, the mobile catering; one is a TSV, the train side vending, where 1 or 2 meals are there, not much meal are there; then e-catering is properly by mobile app, which is possible for any trains, number three; number four, of course, the starting units, which I told, regarding starting units on the platform, when the starting -- where there's refreshment rooms, food plazas and executive lounges.

Understood. Understood. Okay. So is it fair to say that the catering side of the business should grow, like you said, about 10% to 12%, which is also the capacity growth you were talking about?

Yes, yes. Certainly, certainly, without any doubt.

Understood. And do we have a revenue share with Indian Railways on the catering front?

Yes, yes, yes. We have. We have. At the moment, we have -- whatever the revenue is there, then 60% is retained by us and 40% is retained by -- given to -- I mean transferred to Indian Railways because it is their passenger, their inventory there, so therefore, the market we're getting. So 40% we share. That MOU we have with the Indian Railways.

And 40% of the catering revenues or 40% of all revenues?

40% license fee, 40% of the license. Whatever the license fee we earn, out of that 60% is retained by us and 40% is transferred back to the Indian Railways.

Sorry, I'm just trying to understand because we have catering. We have Internet ticketing. We do [indiscernible]. We have Rail Neer. So I'm trying to figure out, when we say 40%, are we talking about 40% of only the catering revenues or 40% of everything?

I will peel one by one. See, first come to the catering only. We are the ones who have been given the mandate to ensure that food [ is given ] to the public. So we, as per the discussions and as per the open tender bid document, we invite the tenders and we, in a panel, the service providers who have a requisite criteria, who can provide good services, I mean, who have the capacity. After that once the bid is there, then there's one who offers the highest bid that -- so that is the advanced license fee. The moment we get the advanced license fee, so after that, we allow him a license to operate the train, I mean they provide the services, as per the bid document. That is as per the menu, whatever has been decided, number one, number -- tariffs, whatever the value card, whatever is there. And of course, you can pair with that, of course, the new water packaging, Rail Neer, our brand, is there. So that is one. However, in future, we are thinking, debating under discussion, that we are seeing that we want to have -- we want to be a benchmark in this industry. And of course, catering to the entire public as such is very difficult. So therefore, we are thinking of now that our kitchens should be modern kitchens of international standard, number one. Number two, that the CapEx, the capital investment should be done by the service provider, the caterer. Number three, we should have a renewable rate of return. So for that matter, we are seeing that for the economies of scale, 1 train, as you told -- like each train, as of now, it's true that each train is a separate contract. We have 1,000 trains, 1,000 contracts are there. So now we are thinking that we should have a cluster. Cluster, that means from all the bigger system, let's say 5, 6, 7 of these trains should start, then for those trains, there should be a kitchen. Kitchen should be a predefined non-international standard as per hygiene and all that, AI vest, camera vest, and something like that, everything. So that the supervisors, [indiscernible], so that the food quality can be tested and can be ISO-certified. So it can be a benchmark. So now -- as of now, we are entering the contract for a very short period, 6 months, 1 month to -- 1 year to -- 6 months to 1 year because there is some -- policy is being debated in a discussion. Very soon, we will be coming out with that. With consultation with the Ministry of Railways, we'll be coming out. Because ultimately, their inventory is there, so therefore, I mean they will have to -- we have to take them into confidence. After that, once this bid document tender will be out, so that means 2 things will be there. The cluster of trains will be there, number one. Number two, of course, according to the bid, a modern kitchen will be there. And number three, the period may be very long term, may be 5 years, 7 years, 8 years. So that the service provider can invest that much of capital in the construction and operation of the modern kitchen. And then he can have the favorable share returns. I mean, it's such a long period. So that is the policy which we are going to come out. The contours are ready, but only the final shape is being done. That will also increase either way some of the -- this license fee to us. And another thing, one more thing I would like to say, that earlier, there were some policy -- changes are there always, but it's a good thing also because we keep on experimenting and debating. Earlier, the one is -- unbundling concept was there, where one -- selling food products is one; and the service provider is another. That means food is being produced by one, but it is being, what you say, served and distributed by another. That has gone to taxation problem and we are giving you the [ right ] taxes in place. So that taxation are necessary, the taxation which is going on. So [ if we want -- if a provider was there ], that taxation, in part, will be taken in the quality improvement of the food. I mean, that food cost will go towards the food cost. So that's another thing. So these changes, they are coming very soon. So just wanted to say that. Because we ensure that better kitchens are there, better service providers can cater to the passenger, less complaints are there, we are able to have the modern kitchen, and along with the AI vest, camera vest, and all that management, I mean to serve even remotely. And then, of course, our service providers, the food testers and all that, all things are there. Then if it is a long-term contract, then it is -- 2 things we'll do there. We will be able to provide the passengers a good quality of service, a good quality of food and also, due to the economies of scale, our revenue share, the revenue or the license fee will also increase slightly. So that will be also, I mean, a profit to us. And out of this whatever license fee, we -- suppose INR 100 is the license fee for one cluster, suppose that in future of what I'm telling you. So about INR 60, INR 60 is there -- so INR 100 is there, INR 60 will be retained by us, INR 40 will be transferred to the Indian Railway because, ultimately, it is -- they're due to them. We got the captive market with their percentage, their inventory. So this is the scenario. So none is [ wasted ], okay?

Understood. Understood. Just one question on that. One of the things I've noticed is we don't take a CapEx on kitchens right now, right? Like, we are not making the food in-house. We have contract -- subcontracting it out. Isn't that right?

See, again, I told you that there will be experimentation with the policies. And so suppose that's in Delhi. Delhi Northern Area, we have our own best kitchen. We are having own best kitchen. But now this thinking of the, I mean, management and ministry also, that why -- in each area, why we should keep on, what you say, spending our CapEx? Because there are two things I told you, suppose that we prepare and someone is distributing, so we should not unnecessarily invest our capital. Our capital should go on for some other, maybe, let's say, I think one nice one is maybe our -- we are coming in the hotels and all that. So then, it was decided rightly that the market is ready to invest the capital, and this should not become, I mean, a stumbling block, and we should not be very rigid. We should give the idea that this model case is standard. This is a high certification. Let them invest and let them also get the return and let them own then also share. So this is a winning situation for all. So that is not what we decided. We are not to invest our capital in the construction of the kitchen all over India, so that policy. Also that we -- I mean it was not there, but still it will be debated. But ultimately, if found that it is not a profitable venture for the company, so ultimately, we have -- we are going for this.

No, that makes sense to me. So the reason I was asking is because we make a lot of return on invested capital, right, so for an investor that is very attractive. So -- but if we were to go and build our own kitchens, obviously, that ROE will come down. So that's why I just wanted to check whether that's -- okay, so that's good. I wanted to talk a little bit about the Internet ticketing business as well. Obviously, 80% to 83% penetration is already very, very good. So should I -- again, this one also, should we assume that it will grow at the same rate as if the train capacity is growing by 10% to 12%?

No, no. Frankly speaking, there are 2 to 3 things I would like to say. This will not be -- because of the digital penetration in the India industry you see that data and, what you said, the Internet penetration and mobile apps and all that are public. So it's increasing every day. So -- but we see in the pre-COVID time and the COVID time, what happened? We increased roughly around 70% to, let's say, around 82%, 83% as of now. What has happened is that due to COVID, there's less traveling and then also there are no option but to book the ticket online. This trend will increase. It's not going to decrease. But the same pace, I am doubtful, to be very frank. I'm doubtful. But it will increase -- keep on increasing because more number of facilities, more number of terminals, more number of younger population, which is coming up, [ younger ] people are coming up. Now everyone is having a mobile app with Internet and smartphone. And so in any case, it's so much convenient because suppose that if you go to book a ticket, you spend INR 20 in the bus. You spend in the line, in queue. Again, you come back, pay INR 20. And then you spend them, let's say, 2 to 3 hours. So no point because in INR 20, you can book the ticket online. So that will increase, number one. Number two, but one is -- what I want to say, the more number of trains being introduced, suppose that even 32% -- percentage-wise is 32%, but the number of the -- I mean, volume-wise, the figure will be very high because the number of trains will keep on increasing, maybe the portfolio -- and by the way, new trains, new trains, which are coming up, the public is sometimes shifting from the air to this, what you say, [ rail ]. For security reasons, I'm going -- commuting from the town, cities to the, I mean, airports, which are always, let's say, 40, 50 kilometers away. Then, of course, there's waiting time, there's security checks and all that. Then after that, again, coming up the luggage, baggage. And then I'm coming -- so what I'm -- what we are seeing sometimes being shifted also. So those passengers are really Internet savvy. And then also, they will always book their tickets online. They will not go to the counters. So we are really confident that it will increase.

But just help me understand one thing, because we have said in our conference calls that the Internet ticketing revenues will probably increase maybe low single digit, mid-single digit. That's sort of what we have said because the penetration is already high. But my question was like if the capacity itself is increasing, then shouldn't the number of tickets booked also increase at maybe 10% or 12%. What am I missing there?

I'll put the question to our GGM IT. Can you please answer it, the technical question there, please?

So my -- I don't know if you caught my question, but my question was, we have said that the ticketing revenues will grow maybe low to mid-single digits. But if...

Yes. Absolute number of tickets being sold will increase.

Please explain 2S? 2S is -- how in each side -- how the ticket will come down, 2S.

2S, actually, during the COVID, social behavior of distancing, we have a 2S class, which is called general class, which doesn't have reserved tickets. So during that COVID period, there were restrictions, so some restrictions. So 2S class was made a reserved class. And therefore, the numbers swelled at that time. In fact, the 2S itself is contributing around 1/3 of the total tickets getting booked online. 1/3 of the tickets were coming from that unreserved class which we have made reserved for a temporary period. Now as the COVID relaxations started over a period of time, and in fact, last year, the government take out a circular that now it is no more required. And I think last year, somewhere around August, September, it was completely taken off. That has given a dent in the overall absolute numbers. But as far as the share of Internet ticketing in overall ticketing is there, it is increasing. And from now on, if we talk then absolute number will also increase as the number of trains gets increased.

Yes. Yes. Okay. That makes sense, actually. And our convenience fee, is that actually a flat rate? Or does it depend on the length of the journey, the ticket fare?

No, it's flat.

It's a flat rate, okay. Understood.

It's for a ticket in respect to number of passengers or distance or fare or class. Of course, it belongs to the class. There are 2 classes. One is the no AC class and the other is AC class. So for the AC class, it is higher and for no AC class, it is lower.

Understood. Understood. Okay. The other question is we've obviously talked about AI using our platform, Internet platform, to do other things and stuff like that. See, I suppose my concern is what would be the reason that somebody would come to the IRCTC website to, I don't know, charge my mobile or do other -- like things that are not related to railways. I'm just wondering whether, given we are putting capital into this and focus into this, might it be a better use of our time to stick to what might be our very core competency? I'm sure I'm mistaken. So it'd be good to get your thoughts.

No, no, no. It's not that bad. Actually, there are a number of users on our website. And we have tried that whatever new product we are starting, we like taking it. Maybe, for whatever reason, one is that they have more trust in us being a government company. We have seen it in the case of air ticketing, in the case of the bus ticketing. And making use of the new emerging technologies, we have started a chatbot. Initially, we started for the inquiry purposes. And last year, we have started ticketing also on that platform. In the long run, we can have advantage over like -- the website is mostly being used in the English, and we have made a Hindi version also. But there are many local regional languages, and that may be one of the reasons that people are still going to the counter because they are more comfortable in the counter in their local vernacular. But soon, through this chatbot, we are going to cover the vernacular languages. And maybe we may snatch a 5% to 10% share from the counters because of the language help in the chatbot.

Understood. Okay. What about other things? Will we go beyond the ticketing as well? Because I was reading up about we might do things like mobile phone charging. You can top-up mobile app. Are you thinking of those things? Or that is something...

Yes, bill payments. We are working on the bill payments. Very soon, maybe in a month's time, we are going to come up with that solution when the bill payments facility will be available on our website to our users. And we foresee a substantial number from that.

Okay. And same with, what is it, iPay, right? We are working with payments. Is that also -- when does -- yes.

Yes. Payment -- iPay also, last year, we had a revenue of INR 96 crores. And this year, we are hoping somewhere around INR 120 crores. In fact, we are required of some regulation approval, which we are in the process. And after that, we hope that we will go to the open market, and our revenue will increase substantially from that.

When you say INR 120 crores, what was that? That was the value of the payments made through our gateway?

No, no. That is revenue, goes then into the -- through the online transaction charge. Whenever any transaction case is in, let's say, INR 1,000 transaction, we charge 1% to 2%, if I...

So commissions, basically.

Yes.

And could we expand a little bit more into -- you mentioned that once we get to a certain maybe INR 120 crores, we will take it to the public. You mentioned something. What was that, the next stage?

Yes, open market it. Actually, we are still using it in-house, for our in-house applications.

Okay. So basically, it will become like your PayTM kind of thing.

Yes, yes.

Okay. But can you make money in this? It seems like it could be a pretty commoditized product? What am I missing here?

We are making it.

Is it? Okay. And when we take it to the open market, how will that work? We'll have to -- it will basically be like Alipay kind of thing. We'll have to set up with vendors who accept this payment? Is that how it goes, one-on-one contracts?

Yes, yes, yes.

Will we start, for instance, with the railway station vendors? Is that how it will work?

Not the station vendors, it will be the online vendors.

Okay. We are not talking about keeping a machine in like a corner shop kind of thing.

No. That basically goes with the banks.

Understood. Understood. Okay. That is helpful. Do we have an idea as to all the new areas that we want to use the platform for? You mentioned that the payment gateway was INR 90 crores of revenues last year. If we were to put all the things we are doing on the platform outside of ticketing, what was the revenue we made? And what could that number be in 3, 5 years' time?

In 3 to 5 years, we may be somewhere around INR 400 crores to INR 500 crores a year.

Okay. But this is x, not including ticketing, yes?

That will be when we are in the open market.

Yes. Understood. Okay. All right. I wanted to speak a little bit about Rail Neer as well. So the one thing I was surprised by was that for our own catering business, we decided not to put any CapEx, for the reason we spoke about. But while we are putting in CapEx for Rail Neer, why not just do that as third-party contracting?

No. This is -- we have -- again, I told you that even in Rail Neer, which is our brand, there are 2 things. One is, of course, this is unvested price by the Ministry of Railways, number one. Number two, we have the mandate to supply this water to all the railway establishment. Number three, now, like the 4 plants which are being commissioned there on total PPP, we have not invested. So the 4 plants are Bhubaneswar, Kota and to Simhadri and Vijayawada. So they are PPP-based. So now we are experimenting because earlier, it was whatever. At that time, the decision was there, and whatever the best to -- I mean, to start with the work was there. But now we are going on only on PPP vest.

Understood. Understood. So who are our partners in these PPP plants?

We invite the tenders. I mean also every department is there. And the criteria is there. Those who have the experience of bottling and what this is -- technically, those who qualify. And then they bid for it, and they are selected in an open and transparent manner.

Understood. And how -- you might have looked at -- there's a company called Nongfu Spring in China, which is the world's biggest bottling company. And if you look at it, their margins are, of course, I mean, 3x or 4x what we have. So I just wanted to get a sense of why -- what was the thought process of saying we will get into bottled water and we are going to take that outside of the railways? Just help me understand what management was thinking when they thought of that.

There are -- I will tell you, around -- before 2000, there were many [indiscernible] and small players and fly-by-night operators, those who had entered into the railway arena, railway domain or other railway establishment. And their quality were not up to the mark and there are too much of complaints of the quality. So ultimately, due to the large number of volumes, at that time, the Ministry of Railway decided we have no option but to provide a quality water at an affordable price. Again, I'm repeating quality water at an affordable price. We have no option, but we should think of it.

Yes. Like, INR 12 a bottle? How much are each one?

Quality, for the whole price. Quality, what I meant to say, quality. Because...

No, no. I was just wondering, is it INR 12 for a 250 ml bottle? Like, what is the price today?

As of now, it is for INR 15. But of course, there is no doubt that in the open market, the same thing is being sold more than INR 20 or sometimes INR 25. That is a fact, the same thing. But another thing...

1-liter bottle, INR 15.

1 liter for INR 15. But our [indiscernible] initial price, and of course, I mean this was decided by the Ministry of Railways. Though it is a fact that as of now, due to the increase in the cost of production, which is basically a function of the petroleum products, which is slightly going higher, so our margins are decreasing. But of course, we -- this is our initial price, the mechanism is there. We do not have the mandate to increase the price. So therefore, I mean, so let's see -- we have, of course, requested because of, what you say, the cost of production, but it is under consideration. But another thing, what you told, why we can't go outside in the railways, there are 2 things. First off, we have almost tried to cover entire Indian railway establishment, that is number one. Number two, we have a system of mandate at the station. That means railway mandated. That means those stations where we cannot provide our packaged water, the Rail Neer brand, we tell the Ministry of Railways to approve some of the brands which are outside to -- and at least ensure that the passengers get [ water ] and said -- or we make a new production capacity or we make a production in that area. And once we are able to supply to that railway establishment, when we perform that railway train, then all the -- that is called the mandated railway station, then all the outside brands have to go away. So that means we have a captive right on the railway establishment. Now this is the criteria that once we will go outside, because this has been earmarked only for the Indian Railways, that brand, that license has been given for only Indian Railways. Now suppose that today, we go out today, then they have an option to come. So this is assured market for us. That is number one. However, nevertheless, no one ever stopped us from making a new brand, not really, the new brand and going and competing in the open market outside railway. So that is another thing. So I will not -- we'll not discuss unless...

So we will not call it railway. We will call it something else.

Yes, yes, of course. That is what I'm telling you. Yes.

Understood. And can you also remind me, what is the revenue share for Rail Neer? I know there was some arbitration going on with Indian Railways on that front.

No, it's -- no arbitration going on because we had to pay the percentage of the profit. So reconciliation between the Indian Railways and IRCTC, I mean, takes time because there are 2 reasons. There are many zones are there, all the zones and then also this is cash-based and all that. So that has taken time in the data collection and the reconciliation. So last year, we had paid around INR 28 crores. INR 28 crores total?

INR 28 crores.

INR 28 crores. So that was all of the -- I mean, all areas, all the preceding that we should have paid earlier. So this was -- kept on building up and then we had paid at the last year. So it was not that it -- it was due to reconciliation, which is a time-consuming exercise because we are on a different platform. We are on an accrual-based accounting. They are on a cash-based accounting. And then we have also 5 zones, they have 18 zones. And so time -- we have taken a time lag over there. Therefore, at one time, we decided that this much has to be...

Hello?

Hello?

Yes. Sorry, we lost you again. So on a contractual basis, like you mentioned, for catering, there's a 40% revenue share. Is there a similar revenue share for rail meal that we have to give Indian Railways on a contractual everyday basis?

Yes, yes, yes. It is there.

What is that number?

15% of profit, 1-5.

Understood. And what about for the ticketing business? Do we have to share any commissions with the railways?

No, no, no. They are -- because, see, we invest in all infrastructure. We have the entire business taken, so therefore -- and one more thing I would like to say, the more -- I mean maintaining our ticketing center for the railways is a very, very costing -- I mean, a positive proposition. Because then, we have to have the entire structure, then ACs, then entire, I mean, Internet, networks, then securities, then manpower, then also establishment, pick everything. So roughly around -- for 1 ticket roughly around more than INR 50, INR 60 is being spent by them. So that cost we have reduced to 0 because we have almost come to 82%. So highly -- and I think you are very rightly told. In the near future, when the more populous -- the young population -- because what I mean to say, still low, there are 3 categories of people who are going through the platform, I mean, to the ticketing counter. Number one, very old Desi people, which are not Internet-savvy, they just think that their money will go away, something like that, very old people. Okay. Now very young people, but very uneducated people. Young but uneducated people. Not young -- I will tell you, young are already educated. Many are still uneducated. So they have some, what you say, Internet or the use of WhatsApp and all that, but they're not very Internet-savvy. Third, but more and more in the young population is coming up. They are coming with all these smartphones, that is the first criteria. The moment they enter the class 10, the class 12 or whatever. So their first salary, they will take first a smartphone. So that is there. And after that, they are used to it. But one more thing there, there is a difference between the Internet ticketing and the counter ticket. If you have to perform a journey in any way, if you take an Internet ticket, then the moment if you confirm but you're not there, which is most likely not because I told you the population versus the traffic facilities, when you are without ticket, you are not entitled to enter and perform your journey. You are not entitled to enter the train. However, if you have to preform journey in any way, if you take the ticket from the counter, you may not get a performed work. But somehow you can perform the journey. So that is another thing. So that is also very important.

So the counter tickets are sold by us or by Indian Railways?

By Railways. They are not sold by us.

Understood. Okay.

As I told you, if there were 100 counters in India earlier, so now hardly 20 counters are there. If, at the same time, a same station, let's say, Delhi or Bombay, let's say, there are 100 counters, different counters, will be there, there are -- hardly 2 counters are functioning because 82% have shifted in that or something like that. So they're reducing.

Yes. And my last question is we have so much cash on the balance sheet. Like, could we think of giving a bigger dividend to shareholders?

Share, I think we have, Divya. As per the -- we are governed by the DPE guidelines for this dividend. So we are already governed by that, number one. Number two, I think we have, all in all, right, from [indiscernible], so we are already paid. And this is, I mean, subject to the BoD. But another thing, we have a plan of the capital investment also where I think we are venturing out in the hotel industry, this budget hotel. And of course, some of the new ventures really coming up. Some of the -- we are going to revamp this, let's say, Internet ticketing due to whatever the -- there's a hardware, software application. So we already appointed consultants. So that is also going on. So that will also take -- so I think we are satisfied as per the dividend, whatever the maximum can do, but of course...

Will we pay the asset owners for the hotel or we just want to do like a management contract?

No, no, no. It will be asset.

But why are we doing that? So there are so many different...

See, there are 2 things -- reasons for this. First, we want to have a presence, so the branding, number one. Number two, we take the best -- I mean this land and I mean [indiscernible] the hotel. Number three, the land price goes high. And you see if you -- the places where we construct the hotel always -- it is always full and the passengers' prime areas, passengers, I guess with their tablets, they will get the confirmed booking. So this is an asset to us, in any case. So we are going for it as far as some business plans. So I think it is all we are going as per what you say, so I'm thinking in the long run.

Okay. It was wonderful talking to you. I had no more questions. If there's anything I can help you with, please let me know if you have any questions from your end. Otherwise, thank you for your time.

No worries. Just have confidence on IRCTC and the investors. And if you talk to investors and, what you say, we have also the brand because whatever you say, so that's -- so I mean the, what you say, the investors are -- they're following. So therefore, let's propagate. We want to hear anything or it's a good suggestion, we have a core team every week. We try to analyze whatever comes in the market to understand that whatever the best practices we can -- the benchmarking with the best practices, and we -- and if I see -- if you see the portfolio, there will hardly be any company which is so diverse, we live on Internet ticketing, then [indiscernible] wins and all that, so the program exchanges and the -- I mean all the [indiscernible], surely then the capping will be there. Then the railway will be there. And then the hotel will be there. And then entire -- tourist traffic also, which is really the [ traveler ] will be there. So for diversity, we cannot find any company of this size and of this much oneness, and the categories of volume and so many diversity. So therefore, we expect you to -- I mean, ensure that you keep on promoting us as you have been promoting earlier as well.

Thank you. And as always, I mean, my father who is 72 years old also uses your IRCTC platform. Thank you.

Thank you. Nice talking to you. Thank you. We can log off then.