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Convenience fee on internet ticketing, catering drove IRCTC top line growth in H1: MP Mall

New products will give really good dividend two-three years down.

ET Now|
Nov 15, 2019, 01.30 PM IST
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ETMarkets.com
MP Mall-IRCTC-1200
There is a dip in top line of State Teerth Special. Last year, we did a total of Rs 195 crore out of the State Teerth Special and Rs 170 crore of that was in the first half. This year, we did only Rs 25 crore in the first half, says MP Mall, Chairman, IRCTC. Excerpts from an interview with ETNOW.

Take us through the first half earnings growth that has contributed to top line this time?
Top line growth has largely come from convenience fee on internet ticketing with a higher turnover on catering and slightly higher turnover on Rail Neer. There is a dip in top line of State Teerth Special. Last year, we did a total of Rs 195 crore out of the State Teerth Special and Rs 170 crore of that was in the first half. This year, we did only Rs 25 crore in first half and another major portion will be done in the second half.

What drove margins? What kind of margins are you working with for the catering business? How do you see overall margins shaping up?
In catering, our regular margin is about 10 to 12% but H1 this year, compared with H1 last year, has seen a drop in margin. Till last year, we were making all the provisions for railway share and other things in the last quarter. This year, we have started doing it on a quarterly basis. This abnormality will be corrected in the March 20 account.

How have the four segments -- internet, ticketing, catering and packaged water under the Rail Neer brand and travel and tourism -- have performed in Q2? What will be the key growth driver?
Catering has grown 8% to 10%. Tourism has also grown except for the State Teerth Specials. This year, we have MOUs worth about Rs 105 crore for State Teerth Specials and most of these trains will run in the second half of the year. There are some aberrations largely because for all the provisioning being made on a quarterly basis like Rail Neer provision for depreciation which earlier we were making on annual accounts. So, the margins appear slightly lower.A correct picture will emerge only in March 20 account.

What contribution do you see from diversified opportunities of e-catering, travel and tourism packages linked with budget hotels and executive lounge services?
Travel, tourism packages, catering -- all are regular businesses. Our e-catering is giving a good dividend. It has grown by almost 100%, if we compare it H1 last year. Another new initiative is our prepaid cash card which we have recently launched. It is also giving a good share in the market. All these are new products which will give really good dividend two-three years down.

Our e-catering is giving a good dividend. It has grown by almost 100%, if we compare it H1 last year.

-MP Mall


IRCTC receives highest traffic from the Asia Pacific region through the website and Rail Connect. Do you see this kind of traffic continuing and what are the growth plans for the company because we have started charging convenience fee. What was the rationale behind that?
We are running this huge system of expenditure on hardware, software, banking reconciliation and banking transaction. We have to maintain a huge after sales services and for that we have a huge call centre. All these expenses are borne by us and now the system is due for upgradation also. We are incurring huge expenditure on running of the system. This convenience fee is largely a cost recovery for that, in addition to some margins. But you must also see the convenience for passengers, booking tickets via phones.

How many more routes will IRCTC be adding? You are also planning to start special trains for tourists next month. Give us the details.
Recently, we were given two trains. The first was Lucknow Tejas. It has already run. Ahmedabad will also be operational by January. This is a new segment which is emerging and Indian railways is opening up this segment to private operators. We would certainly participate in bids and try to take routes which are workable. We are working on that.
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