Sanjay Kumar Jain, CMD, IRCTC, says “among the levers, the catering business is growing very fast and as more trains are expected to be run, particularly Vande Bharat, it will cater to that. IRCTC provides a platform for both catering and ticketing. Similarly, there are the Bharat Gaurav trains. That is also helping the tourism business of IRCTC. We have already tied up with the Uttarakhand government to promote Uttarakhand tourist destinations, which will be operational this year. Many more such discussions are going on with state governments.”

What are the factors that have led to the run up in terms of IRCTC revenue growth of 22% that we saw this quarter? What are the growth levers for the company going forward also? How do you see the top line growing?
Sanjay Kumar Jain: If you see the Q3 results of IRCTC, you will notice that the growth is in all the segments of the business of IRCTC, including catering and tourism. So, all the segments are growing and that contributed to the business. Among the levers, we have the catering business, which is growing very fast and more trains are expected to be run, particularly Vande Bharat. And to cater to that, IRCTC provides platform for catering and ticketing both.

Similarly, there are the Bharat Gaurav trains which are the outcome of a new policy made by the Ministry of Railways in the recent past. That is also helping the tourism business of IRCTC. We have already tied up with the Uttarakhand government to promote Uttarakhand tourist destinations, which will be operational this year. Many more such discussions are going on with state governments. In the case of Rail Neer, we have enhanced the capacity and already added 75,000 litres per day Rail Neer production by adding one plant. By July, we are also going to add another capacity of 75,000 litres per day additionally.

What kind of growth rate can we expect for FY25?
Sanjay Kumar Jain: We should not discuss numbers and percentages. But we can talk about the potential. When India’s economy is booming, Indian railways is also booming. The capex is going very fast and DFC already has extra capacity to run passenger trains on the Indian railway system. Everything put together, I can see only growth, growth and growth.

Okay, so we cannot talk about FY25 in numbers, but can you talk about margins because they declined this quarter, were on the weaker side and we have seen very volatile margin performance. What could be a sustainable number going forward?
Sanjay Kumar Jain: You see, on a margin of Rs 320 crore last year, same quarter, we have achieved Rs 394 crore. So, though it appears flat, if you add the revenue side and in absolute terms, it is growing very nicely. I feel what is more important for the company today is to grow all its segments, including catering and tourism. That is how we can try to maximise the revenue which will lead to more profit for the company.

Also, Rail Neer performance was quite weak this time. When do you expect a turnaround on this?
Sanjay Kumar Jain: It is not on the negative side; rather we have provision for Rs 14.5 crore against the demand to the railways for previous years. That is why the margin appears to be on a negative side. But actually it has given a good margin, good profit to the company.

And what about the food catering segment because that had also started being a material contributor to your business. Do you see the segment growing?
Sanjay Kumar Jain: Food catering, as I told you, the moment new trains are added, the volume will grow. We have already got this new policy on catering where we will have a contract for seven long years. So, that will also give us good revenueWe have already tied up with Zomato and many such aggregators and hopefully we will be able to finalise some of the big ones. That will add to our revenue in catering and certainly absolute terms of profit will also be there.

Yes, you talked about the policy action on the food and beverage side, but the government has been doing a lot right in terms of policy for railways as a whole, there is Vande Bharat, the spiritual tourism packages have been coming up. What kind of contribution do you expect for your business from this, what kind of impact do you foresee?
Sanjay Kumar Jain: Who does not want to go to spiritual places in India? Also, you will be happy to note that Maharaja Express, which brings in inbound traffic and foreign exchange to India, is also booming. So, we will provide that platform for the masses.What are the plans of the company in terms of investment in technology, any plans specifically on the fintech side?
Sanjay Kumar Jain: We have already incorporated a payment gateway, payment aggregator business both for our e-ticketing business and we will invest in this new company, but it is under discussion at the moment.

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