IRCTC catering revenues get a Vande Bharat boost, exclusive tour package tie-ups with state governments in the offing

IRCTC (Indian Railway Catering and Tourism Corporation Ltd), the catering and ticket booking arm of the Railways, has seen a spurt in (catering) orders driven primarily by increased addition of passenger train services like Vande Bharat. From 1200, it now has 1518-odd contracts (up 25 per cent in volumes), which include providing services in all 41-odd Vande Bharat trains. 

• Also read:Railways slashes fares of AC chair cars, executive classes by up to 25%, Vande Bharat passengers to benefit

Against an announced 75 Vande Bharats, so far 41 have been introduced by the Railways. 

Revenues from the catering segment, saw a 30 per cent jump y-o-y to ₹508 crore for the quarter-ending December. It stood at ₹394 crore, the year-ago. Segment revenues grew 18 per cent q-o-q. 

Operating profit increased 84 per cent y-o-y to ₹79 crore for the period under review. 

According to Sanjay Kumar Jain, Chairman and Managing Director, IRCTC Ltd has also entered into tie-ups with food aggregators like Zomato for e-catering services. An entire e-catering ecosystem is being set up across stations and discussions are on to bring in more aggregators onto the ecosystem. 

Some 17-odd aggregators have been on-boarded with services being provided in specific stations and trains. 

 It also has eight non-Railway catering contracts across government offices and court complexes. Seven more contracts are in the pipeline, he said during an earnings call. 

“There has been a rise in catering revenues driven primarily by more passenger trains like Vande Bharat contracts coming in. Vande Bharat, has a multiplier effect on our catering revenues. So you see, there is scope for growth in the segment across categories like e-catering services, non-Railway catering, food plazas and so on,” he said during the call. 

“The Railways have come up with new catering rules and we’re floating tenders for them. Tenders come in five phases. Against the old tenders which were on short-term basis, that is for six months, the new ones are long term catering contracts of five years and extendable for another two more years. This will help improve our numbers,” Jain added. 

Analysts have pointed out that while improving revenues in the catering business is a good sign, the vertical continues to have low margins. 

Rail Neer, the bottled water plant, will be ramped up to 18.4 lakh bottles per day by FY25. At least two facilities are to be inaugurated this year. The current capacity, across various own, PPP-units and outsourced bottling plants, stand at 16.96 lakh bottles per day. 

The vertical reported a turnover of ₹84 crore, up 5 per cent y-o-y.. 

Tie-Up with State Governments 

IRCTC, Jain said, is also eyeing tie-ups with state governments for mass rail-based tourism bookings. 

It runs 11-odd Bharat Gaurav trains and tie-ups with state governments would ensure assured bookings and coverage of operational costs too. 

Recently, it tied up with the Uttarakhand Tourist Development Board (UTDB) to operate a tourist train, the Manaskhand Express. The UTDB shall bear the operation cost of Bharat Gaurav Trains and IRCTC shall design the tour itineraries, prepare the tour package, booking of tour and provide services to the booked tourists during the tour. The MoU has been signed initially for two years, which would be further extended.

“We are looking at similar MoUs with other state governments. Discussions are on with Maharashtra and some others,” Jain said. 

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The tourism vertical reported a revenue of ₹168 crore in Q3FY24, up 37 per cent y-o-y; whereas State Teertha revenues saw a 20 per cent jump to ₹30 crore.

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