Five takeaways from IRCTC’s first quarter results

IRCTC, a wholly-owned subsidiary of Indian Railways, posted revenue of Rs 257.9 crore in the first quarter of fiscal year 2022 (FY 2022). It was 28 percent lower than the previous quarter, but 65 percent more than the quarterly revenue last year.

Indian Railway Catering and Tourism Corporation (IRCTC) operates in four business segments: internet ticketing, catering and hospitality, packaged drinking water, and travel and tourism.

The company reported Rs 82.5 crore of profit, which declined 20.5 percent sequentially, and recovered from a Rs 24.60-crore quarterly loss a year ago.

Here are the key takeaways from IRCTC's June 2021 results:

1. Internet ticketing revenue drops sequentially

Internet ticketing is the highest revenue-contributor to IRCTC. During the first quarter of FY 2022, the e-ticketing revenue of Rs 149.97 crore accounted for nearly 64 percent of its revenue.

It dropped by 29 percent sequentially because of the second wave restrictions across states.

Rajni Hasija, Managing Director of IRCTC, told equity analysts that the average number of trains per day has been rising since June, which will have a positive impact on the internet ticketing business. In the quarter ended June 2021, 63.7 million tickets were booked on IRCTC.

2. Increased revenue from digital payments

IRCTC’s payment gateway app ‘iPay’ clocked revenue of Rs 3.5 crore in the June 2021 quarter. The iPay app, introduced in 2019, enables users to make online payments for travel-related services. It is fully controlled by IRCTC, and has myriad payment options.

The company's open wallet ‘iMudra’ is yet to show growth on a user base of 0.6 million. As per the management, the e-wallet has the ability to grow in future, but faces strong competition from private players and payment banks.

Nearly 26 percent of all IRCTC bookings in the June 2021 quarter came through UPI (Unified Payment Interface).

3. IRCTC's plans for e-catering

IRCTC has been having partnership discussions with food-tech companies Zomato and Swiggy for online catering. But the talks haven't been encouraging due to high charges from these companies, according to the IRCTC management.

"We are in talks with another brand who can supply the food and work as a delivery aggregator," Hasija told equity analysts on August 13. Catering is the second-highest contributor to IRCTC's revenue, accounting for 24 percent of operational revenue in the June 2021 quarter.

In a day, IRCTC's average booking for e-catering is 17,000 orders. While it is still lower than the pre-COVID levels of 21,000, IRCTC wants to enable online ordering and delivery for the catering segment.

4. Operation of private trains

On the private rail tender, IRCTC and NIIF have signed a non-binding Memorandum of Understanding (MoU). Investments are yet to be finalised with more details to come in the next year. The company has participated in three more cluster bids, and is awaiting results from the Ministry of Railways.

5. Share split in 1:5 ratio

The IRCTC board has approved a stock split. Here, the face value of one equity share will be reduced from Rs 10 to Rs 2 a share. This was done to comply with the guidelines of Capital Restructuring of Central Public Sector Enterprises issued by the Ministry of Finance, and ensure liquidity in the capital market.

The share split is pending approval from the Ministry of Railways.