Vande Bharat, High-Speed Trains To Be Key Drivers For IRCTC, Says CMD

Indian Railway Catering and Tourism Corporation (IRCTC) expects strong growth in the coming quarters, driven by investments in railway infrastructure and new high-speed trains. The company’s Chairman and Managing Director, Sanjay Kumar Jain, emphasised the expected expansion across business segments and the long-term benefits from trains like Vande Bharat.

Reflecting on the Q1 performance in an interview with NDTV Profit, Jain said, “It’s the highest-ever Q1 result both in revenue and margin. All our segments, except tourism, have done very well, growing in double digits. Tourism was impacted due to the model code of conduct before the election, but we’ll bounce back this quarter."

Jain highlighted the favourable demand environment and the future growth prospects from increased investment in railway infrastructure. “The investment in infrastructure is growing, the economy is booming, and we expect to get more trains in the days to come. All segments, be it catering, tourism, or IT, are likely to grow,” he added.

As far as the tourism business is concerned, Jain said, “IRCTC has been involved in two kinds of tourism — mass tourism through Bharat Gaurav trains, which couldn’t do much due to the model code of conduct, and rail-based tourism packages, which have grown by 26%. Outbound tourism increased by 229% this quarter."

On new MoUs, Jain added, “We have agreements with eight state governments, and with two other states, the MoUs are in process. These signings are likely to happen within this quarter.”

On the transformative potential of the new high-speed trains, Jain said, “Vande Bharat and high-speed trains are certainly going to make transportation smoother for passengers across India. They will even pose a challenge to low-cost airlines. As more trains are introduced, it means more business for IRCTC. The only challenge will be to grab as much as possible and as quickly as possible.”

Jain further explained the current contribution of Vande Bharat trains to IRCTC’s revenue, noting, “The Vande Bharat trains contribute significantly to our revenue. Out of 51 pairs of Vande Bharat trains, we provide catering in 48. As the number of trains increases, we’ll improve our share.”

In the first quarter of FY25, IRCTC reported varied performance across its business segments. The catering segment saw a modest increase in margins, rising from 13% in Q1FY24 to 14% in Q1FY25.

Rail Neer experienced a slight dip in margins, from 13% to 12% over the same period. In the e-ticketing segment, margins remained steady at 83%. The tourism vertical saw a significant improvement, bouncing back from a negative margin of 27% in Q1FY24 to a positive 7% in Q1FY25.

Revenue-wise, IRCTC's catering segment grew by 17.2%, from Rs 477 crore in Q1FY24 to Rs 559 crore in Q1FY25. The Rail Neer segment also showed healthy growth, with revenue increasing from Rs 95 crore to Rs 111 crore in the June quarter, a 16.3% rise year-on-year.

E-ticketing revenue climbed by 13.4%, reaching Rs 329 crore compared to Rs 290 crore in the year-ago quarter. However, the tourism segment saw a decline in revenue, falling by 12.4% from Rs 142 crore in Q1FY24 to Rs 124 crore in Q1FY25, primarily due to external factors like the model code of conduct during the Lok Sabha elections.

IRCTC shares opened higher at Rs 924.95 apiece on the BSE and rallied up to 1.7% to hit an intraday high of Rs 940.6 apiece.