IRCTCNSEQ1FY23August 17, 2022

Indian Railway Catering And Tourism Corporation Limited

8,086words
133turns
10analyst exchanges
2executives
Management on call
Devang Bhatt
IDBI CAPITAL
Ajit Kumar
DIRECTOR, FINANCE & CHIEF
Key numbers — 40 extracted
Rs.853 Crore
ure and its ability to scale up. First quarter of this financial year, the revenue has reached at Rs.853 Crores and we saw a strong growth of 23% quarter over quarter and more than 2.5 times on the year over
23%
er of this financial year, the revenue has reached at Rs.853 Crores and we saw a strong growth of 23% quarter over quarter and more than 2.5 times on the year over year given that the base quarter ha
37.6%
ility of our business segment, the change in the business mix resulted in EBITDA margin coming to 37.6% versus 45.8% year over year and 41.1% quarter over quarter. As I have shared earlier that the p
45.8%
business segment, the change in the business mix resulted in EBITDA margin coming to 37.6% versus 45.8% year over year and 41.1% quarter over quarter. As I have shared earlier that the pandemic is be
41.1%
e in the business mix resulted in EBITDA margin coming to 37.6% versus 45.8% year over year and 41.1% quarter over quarter. As I have shared earlier that the pandemic is behind the travel and hospita
Rs.853 Crore
r quarter of strong improvement on both quarter-on-quarter and year-on-year basis. The revenue of Rs.853 Crores grew by 23% quarter-on-quarter and by 250% year-on-year given the impact of the pandemic in the
250%
uarter and year-on-year basis. The revenue of Rs.853 Crores grew by 23% quarter-on-quarter and by 250% year-on-year given the impact of the pandemic in the base quarter, of course this base is not rig
40.1%
saw sharp increase in revenue share the overall EBITDA margin 37.6% versus 45.8% year-on-year and 40.1% quarter-on-quarter; however, absolute EBITDA has grown by 15.7% quarter- on-quarter to Rs.321 Cro
15.7%
.6% versus 45.8% year-on-year and 40.1% quarter-on-quarter; however, absolute EBITDA has grown by 15.7% quarter- on-quarter to Rs.321 Crores which is an all-time high. Let me now move to the business
Rs.321 Crore
and 40.1% quarter-on-quarter; however, absolute EBITDA has grown by 15.7% quarter- on-quarter to Rs.321 Crores which is an all-time high. Let me now move to the business segments of the company. Internet t
Rs.301 Crore
t ticketing, this segment continued demonstrate its resilience and revenue for the quarter was at Rs.301 Crores which is more than a double year on year and grew by 3% quarter-on- quarter while the EBIT mar
3%
revenue for the quarter was at Rs.301 Crores which is more than a double year on year and grew by 3% quarter-on- quarter while the EBIT margin seen a quarter-on-quarter decline, but it is a similar
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Guidance — 16 items
Rajni Hasija
qa
“In this quarter, we were able to tender most of the trains so you could see many of the units which were otherwise closed or the trains which were not earlier tender or trains were running ready to eat model, all trains now are being brought on the tendering mode, still you may see some more improvement in the next quarter if more trains we are able to tender out.”
Pritesh Chheda
qa
“No, this notification was valid until June 22 right until June 22, the 2S will be booked via?”
Rajni Hasija
qa
“Normally July is a rainy season we see some decline, some decline had been there, marginal decline, which will be overcome.”
Rajni Hasija
qa
“Since the impact of that is going to be more effective from the July, we normally see the average booking happening to the tune of 11.20 lakh more at times it is 50000 more than few days, but the ARP booking of the festival season has also started, so some gain will be there from that side, so 2S ticket yes, will have some impact but should we overcome by the other factors also then answering your question on the catering.”
Rajni Hasija
qa
“First, the position of those retiring rooms are to be taken and then they are to be tendered out then we again plan give the tender for the upgradation and the few of our tenders are opening by after August 18 or so, so you can say the retiring room upgradation work is going on a full swing and the result will be forthcoming in this quarter.”
Rajni Hasija
qa
“As far as a specific internet ticketing segment is concerned so some impact of unreserved ticketing is still there and now the results will be seen in this quarter because the first quarter is a very challenging for all the internet companies.”
Akshay Bhor
qa
“I just wanted to clarify that 8.5 lakh per day number that you are doing pre-COVID what will be corresponding number now if you are just for the 2S bookings that you will not do from let us say this quarter onwards?”
Rajni Hasija
qa
“I can share you in the month of April, the capacity utilization has been 74% and in May it was 82%, June it was 83.48% and July I will share in the next quarter.”
Rajni Hasija
qa
“If railway is going to run more trains, we will be providing more catering to the trains.”
Rajni Hasija
qa
“With some impact in the overall industry had been seen after the things have resumed because when the travel happened, the hit on the website increases, so the advertisement potential goes up, so indirect impact will be there Rahul ji.”
Risks & concerns — 7 flagged
First quarter of this financial year, the revenue has reached at Rs.853 Crores and we saw a strong growth of 23% quarter over quarter and more than 2.5 times on the year over year given that the base quarter had the impact of pandemic, so if you compare with the previous quarter there is a 23% growth.
— Rajni Hasija
The revenue of Rs.853 Crores grew by 23% quarter-on-quarter and by 250% year-on-year given the impact of the pandemic in the base quarter, of course this base is not right for the comparison, but this is the fact that this comparison we are taking.
— Ajit Kumar
Internet ticketing, this segment continued demonstrate its resilience and revenue for the quarter was at Rs.301 Crores which is more than a double year on year and grew by 3% quarter-on- quarter while the EBIT margin seen a quarter-on-quarter decline, but it is a similar level to that in Q3 FY2022 and was at 84.5% in Q1 FY2023.
— Ajit Kumar
Normally July is a rainy season we see some decline, some decline had been there, marginal decline, which will be overcome.
— Rajni Hasija
That is the number of a 2S decline, the total number of booking getting reduced.
— Rajni Hasija
Since the impact of that is going to be more effective from the July, we normally see the average booking happening to the tune of 11.20 lakh more at times it is 50000 more than few days, but the ARP booking of the festival season has also started, so some gain will be there from that side, so 2S ticket yes, will have some impact but should we overcome by the other factors also then answering your question on the catering.
— Rajni Hasija
As far as a specific internet ticketing segment is concerned so some impact of unreserved ticketing is still there and now the results will be seen in this quarter because the first quarter is a very challenging for all the internet companies.
— Rajni Hasija
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Q&A — 10 exchanges
Q
Thanks for the opportunity and congratulations on the steady quarter. Madam, I have a question on the catering piece I see the review at about Rs.352 Crores in this quarter so does this take into account, the effect of enhancement in license fee due to tariff hike and should this be the steady quarterly run rate from here on and also secondly, if I look at the catering expense in this quarter as a percentage of catering revenue it was about 74% and pre- COVID this number was in the band of 62% to 65% so is there any element of one of here?
Rajni Hasija
We will answer to your first question Mr. Jinesh is that the impact of the sale assessment has not been taken in this quarter, because once we complete the assessment then some time has to be given to the licensee to arrange for the funds, so we are still in process of completing that because of heavy traffic moving on, on the trains the peak season is over now the lean period is now left so that is being completed so maybe the next quarter, in the present quarter we would be completing, but the impact may be seen in the third quarter only. Got it, so this Rs.352 Crores of a quarterly run rate
Q
Can you give us the ticket number for Q1 and what is the status on or update on the 2S class?
Rajni Hasija
Number of ticket books in the first quarter has been around 11.58 Crores and your daily average comes out to be 12.73 lakh tickets. Update on the 2S class which was supposed to be? 2S as we had anticipated earlier it used to be nearly 38%, now in this particular quarter, the overall percentage of the 2S has reduced to 26.9%. No, this notification was valid until June 22 right until June 22, the 2S will be booked via? Yes. So, any update there on that about 2S? In the month of July, the 2S percentage is more or less nearly same. So it still continues to be on the internet form of booking? Yes,
Q
Thanks for the opportunity. Madam, first on the catering piece if you could help us understand better, what are the margin we had and do we see any pricing improvement happening anytime soon given that now there is a tier change in terms of user preferences in terms of eating out. Secondary madam, on the 2S so just continuing the question asked by the previous person, do we see this number falling down drastically given that a lot of trains or 2S is now taken out of being reserved online? Thank you.
Rajni Hasija
Answering your second question first. That is the number of a 2S decline, the total number of booking getting reduced. As we had mentioned that this was a temporary kind of a revenue available with the IRCTC which was to be reduced, but as we have noticed that the reduction is not as drastic as we were anticipating, yes, there is going to be some downfall as far as the number of ticket is concerned. Last quarter, we had overcome that by the volumes and our bookings were much higher than the previous year average when the 2S booking was running in a full sink. Since the impact of that is going
Q
I have a couple of questions. First is about the retiring room upgradation, you had mentioned in the last call that new contracts were to be awarded for retiring room upgradation, so any progress on that and would it help in increasing the revenue or has it already helped in that regard?
Rajni Hasija
Yes, of course because in the retiring room category, we have done a road show and we were successful in awarding 23 such contracts in all the zones and rest of contracts in the pipeline and we are also in process of taking over more and more retiring room from the railways. First, the position of those retiring rooms are to be taken and then they are to be tendered out then we again plan give the tender for the upgradation and the few of our tenders are opening by after August 18 or so, so you can say the retiring room upgradation work is going on a full swing and the result will be forthcomi
Q
Thank you for the opportunity. Sorry with this I want to clarify first up on this 2S question again. There was earlier a notification back from June onwards you will not be booking any unreserved tickets that you do during the pandemic just wanted to understand that is you have stopped booking on those trains right now, is that understanding correct?
Rajni Hasija
I would like to make you the procedure clears all of you. Whatever inventory is offered for sale it is offered by the Indian Railways whether reserved or unreserved, so that particular inventory and database for that is being maintained by Indian Railways. We call it forming a train, a train is formed by a database section of Indian Railways in various zones, so those sales were offered to us for sale and we could sell it in a better manner and we sold it, we earned good amount for us. Since these trains are no longer considered worthy for giving on a reserved segment so the ministry of railwa
Q
Thanks for the opportunity. I have a couple of questions. First is most of them data keeping. One is in this first quarter, what is the capacity utilization in the Rail Neer segment?
Rajni Hasija
It has been more than 70% in all three months. I can share you in the month of April, the capacity utilization has been 74% and in May it was 82%, June it was 83.48% and July I will share in the next quarter. Okay madam, just the capacity ramp up schedule for Rail Neer in the coming few years? It is scheduled. This Simhadri plant is almost ready, we may commission it anytime, we are waiting for one of the license, so that one upgradation that 1.2 lakh liter will be there, very soon with us and our Bhusawal plant is also nearing completion may be ready near October, so two plants will be opened
Q
Thanks for the opportunity. Congratulations on very strong numbers. I just want to ask one question in terms of cost, can we say there is a segmental cost which we have on this fixed basis are now back to the normalized run rate basis and here on we will see the growth basis cost increase or there are certain costs which are yet to go back to the normalized run rate?
Rajni Hasija
I think same rate is going to be there. Right and secondly from the 2S volume whatever impact which we may happen, but what is the impact we may see on their non-ticketing revenue within the internet ticketing segment, do you see any correlation to that as well? With some impact in the overall industry had been seen after the things have resumed because when the travel happened, the hit on the website increases, so the advertisement potential goes up, so indirect impact will be there Rahul ji. Right and on the state teertha side we have done very well in this particular quarter, so how is the
Q
Thank you for the opportunity again. I just wanted to understand both employee expenses and other expenses have been lower on a sequential basis from Q4 of last year despite the pickup in the activity. Just want to understand what is behind it?
Rajni Hasija
In the earlier year, the provision for PRP had been more, now we have standardized that from based on our experience that excess provisioning is not required. When we do more provisioning it is counted in expenses, so this time we have reduced that expenses, although needs of each and every employee has been covered, so excess provisioning does not make any sense so we have reduced the provisioning for that is why you can see the less expenses. Got it and the run rate for July in terms of internet ticket booking, can you please share that, because some of the data shared by railways on passeng
Q
Thanks for the opportunity. I would like to know the volume and value of bus ticketing business this quarter and how do you see it going forward madam?
Rajni Hasija
I will share some figures with you for a couple seconds. In the year 2021-2022 last financial year, our total revenue from the bus booking has been nearly Rs.4.95 Crores and out of which IRCTC share was nearly Rs.35 lakh or so, IRCTC share is in terms of convenience fee and commission right, but we have tied up with the eight state governments and in the first quarter alone we have been able to earn revenue of Rs.4.51 Crores and Rs.32 lakhs is our commission plus convenience fee so the quantum and the potential in the bus traffic is more, but the only thing is that we have tied up through an a
Q
As usual the session has been very interactive and we hope that IRCTC has been able to answer all your queries and doubts, although I can only tell you that this has been the best quarter so far and my team has done really its best and to make up all the losses which we had during the COVID period because the entire industry was suffering with that. With this note I hope very good luck to all of you and wishing you a very Happy Independence Day. Azadi Ka Amrit Mahotsav we will celebrate, our AGM is also falling on 26, so whosoever our shareholders are request them to join online, it is going t
Management
Speaking time
Rajni Hasija
56
Akshay Bhor
17
Moderator
12
Jinesh Joshi
10
Madhuchanda Dey
9
Rahul Jain
7
Pritesh Chheda
6
Sridhar Manke
6
Deep Shah
5
Rattan Juneja
3
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Opening remarks
Devang Bhatt
Thanks Rochelle. Good afternoon everyone. On behalf of IDBI Capital I welcome you to the Q1 FY2023 earnings concall of Indian Railways Catering and Tourism Corporation or IRCTC. On behalf of IDBI Capital I would like to thank the management for giving us an opportunity to host the call. We have with us management represented by Mrs. Rajni Hasija, Chairperson and Managing Director and Mr. Ajit Kumar, Director Finance and CFO. I would now like to hand over the call to the management for opening remarks. Later we can open the floor for Q&A. Thank you and over to you Rajni Madam!
Rajni Hasija
Thank you Devang. A very good afternoon to everybody. At the outset let me welcome you all to this concall of IRCTC Limited for the quarter that has ended on June 30, 2022. I hope that you and your dear ones are in a good health and the spirit of the Independence Day is going on as Azadi Ka Amrit Mahotsav is being celebrated by all of us. Yesterday our company has announced un-audited financial results for the first quarter of fiscal 2023 and the same has been disclosed on both stock exchanges too. I shall first give a brief overview about the first quarter of this financial year post which our director finance and CFO of the company too will provide all the details of the performance of all business segments after which we shall have a question and answer session. In the first quarter of the current financial year, I think this particular quarter was without any restriction since the pandemic hit all of us and IRCTC business model has once again demonstrated it resilient nature and it
Ajit Kumar
Good afternoon everybody. I hope everyone in the spirit of Independence, there is a joy in the year. I shall first give a brief overview about this Q1 FY2023 results and then we will have the question and answer session. Q1 FY2023 revenue saw another quarter of strong improvement on both quarter-on-quarter and year-on-year basis. The revenue of Rs.853 Crores grew by 23% quarter-on-quarter and by 250% year-on-year given the impact of the pandemic in the base quarter, of course this base is not right for the comparison, but this is the fact that this comparison we are taking. Given that catering segments which has relatively lower margin saw sharp increase in revenue share the overall EBITDA margin 37.6% versus 45.8% year-on-year and 40.1% quarter-on-quarter; however, absolute EBITDA has grown by 15.7% quarter- on-quarter to Rs.321 Crores which is an all-time high. Let me now move to the business segments of the company. Internet ticketing, this segment continued demonstrate its resilien
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