I R C T C — Q3 FY25 earnings call

Call held 11 Feb 2025

Management summary

IRCTC delivered an exceptional Q3 FY25 with record revenue and strong PAT growth, primarily driven by robust performance in the Catering, Tourism, and Rail Neer segments. While Internet Ticketing shows signs of saturation, the company is actively exploring non-conventional income sources and pursuing a payment aggregator license. Despite margin pressure in Catering, management remains optimistic about future improvements and continued growth across all business areas.

Highlights

  • All-time high revenue of ₹1,225 crores, up ~10% YoY.

  • PAT of ₹341 crores, reflecting a ~14% YoY increase.

  • EBITDA reached ₹417 crores, marking a 5.83% YoY and 11.8% QoQ growth.

  • Tourism segment revenue grew 80% QoQ and 16% YoY to ₹224 crores, driven by luxury trains and State Teerth.

  • Rail Neer segment revenue increased 7% QoQ and 16% YoY to ₹92.39 crores, with absolute EBITDA up 32% QoQ and 464% YoY.

Concerns

  • Internet Ticketing segment nearing saturation with ~87.42% of tickets booked through the portal, limiting incremental growth.

  • Catering segment EBITDA margin declined to 12.19% in Q3 FY25 from 15.44% in Q3 FY24, due to base kitchen closures and new tendering process.

  • Internet Ticketing revenue saw a slight QoQ decline of 4.65%, attributed to seasonal booking patterns.

Key financials

  1. Revenue ₹1,225 Cr +10%YoY
  2. PAT ₹341 Cr +14%YoY
  3. EBITDA ₹417 Cr +5.8%YoY
  4. EBITDA Margin 34%
  5. Net Worth ₹3,546 Cr

What they filed

Q1 FY27: revenue up 18.1%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,064 1,225 1,269 1,160 1,146 +8%1,449 +18%1,460 +15%1,370 +18%
EBITDA373 417 385 397 404 +8%465 +12%399 +4%387 −3%
Net profit308 341 358 330 342 +11%394 +16%327 −9%330 +0%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,224.92 Cr Total
  • Catering ₹554.81 Cr 45.3%
  • Internet Ticketing ₹353.72 Cr 28.9%
  • Tourism ₹224 Cr 18.3%
  • Rail Neer ₹92.39 Cr 7.5%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Capitalization of new office building
    • New Rail Neer plants (3 more planned)
    Regarding your question on to our capitalization of new office building part, this will be doing in this quarter, Q4FY25. And there are 3 plants which we are planning to bring in the coming financial year.
  • Liquidity Liquidity disclosed Company's net worth is INR 3,546 crores.
    Overall, our Q3 financial year '25 results highlight a successful quarter of growth and strategic execution. We remain committed to sustaining the momentum and delivering long-term value to our stakeholders. As of today, the company's net worth is INR3,546 crores.

Guidance & targets

Capacity

  • Rail Neer Capacity Addition Capacity · coming financial year · High confidence 2 lakh bottles/day
    And there are 3 plants which we are planning to bring in the coming financial year. So that will also add to our capacity by, say, around 1,50,000 bottles and more, I think it's 2 lakhs bottles.

    — Sanjay Kumar Jain

Revenue

  • Tourism Luxury Train Revenue Revenue · this year · High confidence more than ₹95 crores

    From ₹65 crores (last year) today

    You see, if you see our luxury train, last year, we did overall in the year INR65 crores. This year, we are expected to come up to more than INR95 crores, and it is giving us around 30% operating margin of our business.

    — Sanjay Kumar Jain

Profitability

  • Tourism Operating Margin Profitability · this year · High confidence around 30%
    This year, we are expected to come up to more than INR95 crores, and it is giving us around 30% operating margin of our business.

    — Sanjay Kumar Jain

Margin

  • Catering Margin Margin · coming quarters · Medium confidence improve
    So, margin is going to improve.

    — Sanjay Kumar Jain

Regulatory

  • Payment Aggregator License Status Regulatory · soon · High confidence in-principal approval soon
    So hopefully, we'll get the in-principal approval of RBI soon, and then we'll plan to get the license as such.

    — Sanjay Kumar Jain

What to watch in Q4 FY25

Payment Aggregator License Approval

soon
Current Applied to RBI on Dec 12, awaiting in-principal approval
Target In-principal approval from RBI

Why it matters

Unlocks a new, potentially significant revenue stream for IRCTC.

So hopefully, we'll get the in-principal approval of RBI soon, and then we'll plan to get the license as such.

Risks & concerns

  • Internet Ticketing Segment Saturation

    medium

    Incremental growth in ticket booking may be limited as ~87.42% of tickets are already booked through the portal; company is exploring non-conventional income sources.

    Management acknowledged

  • Catering Segment Margin Pressure

    medium

    EBITDA margin declined due to closure of 9 departmental base kitchens and transition to a licensing model, along with changes in the tendering process; management expects improvement with new infrastructure.

    Management acknowledged

Q&A highlights

7 direct
Impact of Swa Rail app on convenience fee Direct
This will have no impact on our convenience fee because this is just one of the many modes which we are doing. So, to my mind, to our mind, this will make no difference because the convenience fee, whatever is being charged to the passengers will be coming straight to IRCTC.

Clarifies that a new railway app will not negatively impact IRCTC's core revenue stream from convenience fees.

Asked by Jinesh Joshi

Progress of e-Catering business Direct
this quarter, we have done more than 1 lakh average meals per day, not orders, meals per day. So, in -- if you compare our year-on-year basis, last year, it was 61,522 meals per day. This quarter, we have done 102,561 meals per day.

Highlights significant growth in the e-Catering segment, demonstrating successful expansion efforts.

Asked by Jinesh Joshi

Sustainability of Internet Ticketing margin Direct
So, when we are already doing 87% of the booking, now we are trying to maximize our non-fare revenues. So, this what will happen now, and that is what has happened.

Explains that margin improvement in Internet Ticketing is driven by increasing non-fare revenues, mitigating saturation risk in core booking.

Asked by Deepak

Sustainability of Tourism segment growth and margin Direct
Of course, yes. Rather, we'll grow further... this will continue. We have taken additional rake of Bharat Gaurav train because we are having the business out of that. That is also -- that will also add both revenue and the margin to us.

Provides a positive outlook on the high-growth Tourism segment, indicating sustained performance and margin.

Asked by Deepak

Impact of advance booking window change on cancelled ticket revenue Direct
when the tickets are cancelled, earlier also, we were not taking -- charging anything. We used to take convenience fee only and only on -- at the time of booking. So, it will not have any impact on to us.

Clarifies that a regulatory change in advance booking window will not affect convenience fee revenue from cancelled tickets.

Asked by Deepak

Status and potential of Payment Aggregator license Direct
We have already applied for the in-principal approval of RBI on 12th of December... So hopefully, we'll get the in-principal approval of RBI soon, and then we'll plan to get the license as such... there is a huge, huge potential for on a transaction value level.

Highlights a new potential revenue stream and its significant upside, with an update on the approval process.

Asked by Rattan Joneja

Strategy for convenience fee (percentage vs. fixed) Partial
You see it's a very price-sensitive segment. So, we are wanting to maximize our revenue and profit both by getting more and more business.

Reveals management's preference for volume maximization over increasing convenience fee rates, even with rising ticket prices.

Asked by Rattan Joneja

Reasons for Catering margin decline Direct
First is that we have closed down our base kitchens, 9 base kitchens, which we are running on departmental basis that was closed because of the new catering policy wherein now we have gone for licensing model... The second thing is the new tendering process, which we have done through clustering mode, here we are not charging 15% on a billing.

Provides specific operational reasons for the observed margin pressure in the Catering segment.

Asked by Madhuchanda Dey

3 min read 7 chapters

Detailed narrative

Strong Q3 FY25 Financial Performance

IRCTC reported an exceptional Q3 FY25, achieving an all-time high revenue of INR 1,225 crores and a PAT of INR 341 crores. This represents a robust ~10% year-on-year revenue growth and ~14% PAT growth. The company's EBITDA reached INR 417 crores, marking a 5.83% YoY and 11.8% QoQ increase, with an overall EBITDA margin of 34.04%. This strong performance highlights the company's resilience and operational efficiency.

Internet Ticketing Segment: Saturation and Non-Fare Revenue Focus

The Internet Ticketing segment generated revenue of INR 353.72 crores, showing a 5.4% YoY growth despite a 4.65% QoQ decline attributed to seasonal booking patterns. Management noted that the segment is nearing saturation, with approximately 87.42% of tickets already booked through their portal. To counter this, IRCTC is actively exploring opportunities to enhance non-conventional income sources beyond convenience fees, which contributed an additional INR 5.64 crores QoQ.

Catering Segment: Growth Amidst Margin Pressure

The Catering segment demonstrated strong growth, with revenue rising to INR 554.81 crores, an increase of 15% QoQ and 9% YoY. However, the EBITDA margin for this segment declined to 12.19% in Q3 FY25 from 15.44% in Q3 FY24. This margin pressure was attributed to the closure of 9 departmental base kitchens and the transition to a licensing model under the new catering policy, as well as changes in the tendering process. Management expects margins to improve with new infrastructure and increased business.

Tourism Segment: Exceptional Growth Driven by Luxury Offerings

The Tourism segment witnessed remarkable growth, with revenue reaching INR 224 crores in Q3 FY25, an 80% QoQ and 16% YoY increase. This exceptional performance was primarily driven by the operation of luxury segments such as Maharaja Express, which generated INR 38 crores in revenue (up from INR 27 crores last year), and State Teerth trains, including Bharat Gaurav trains, contributing INR 65 crores (up from INR 28 crores last year). Management expressed confidence in sustaining this growth and maintaining or improving the segment's EBITDA margin of 16.94%.

Rail Neer Segment: Capacity Expansion and Profitability

The Rail Neer segment reported steady revenue of INR 92.39 crores, reflecting a 7% QoQ and 16% YoY increase. The EBITDA margin remained stable at 12.84%, with absolute EBITDA increasing 32% QoQ and 464% YoY. The company inaugurated a new plant in Vijayawada in October '24 and plans to bring 3 more plants online in the coming financial year, which will add approximately 2 lakh bottles per day to the current capacity of 18.4 lakh bottles per day, further enhancing profitability.

Pursuit of Payment Aggregator License

IRCTC has applied to RBI for an in-principal approval for a payment aggregator license on December 12. Management anticipates receiving the approval soon and sees huge potential in this business, particularly within the government sector. They highlighted IRCTC's existing strong position in transaction value for website and mobile bookings, indicating a significant opportunity once the license is secured.

Kumbh Mela Contribution and Strategic Initiatives

The company is actively involved in the Kumbh Mela, running 8 Bharat Gaurav tourist trains to destinations like Prayagraj and Ayodhya, which are fully booked. Additionally, IRCTC has set up a 100-room tent city, which is also fully sold out. These direct initiatives are expected to contribute significantly to revenue across ticketing, catering, and Rail Neer segments, leveraging the increased footfall and special train operations during the event.

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