Ladies and gentlemen, good day and welcome to the Indian Railway Catering and Tourism Corporation Limited, IRCTC, Q2 FY23 earnings conference call hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and over to you, Mr. Jain.
Thank you, Samri. Good afternoon, everyone. On behalf of Dolat Capital, we welcome you all to the Q2 and half-yearly results for FY 2023 conference call of IRCTC Limited. I take this opportunity to welcome the management of IRCTC, represented by Shrimati Rajni Hasija-ji, who is CMD of the company, and Mr. Ajit Kumar-ji, who is Director of Finance and CFO of the company. Now, I would like to hand the conference over to the management to take the proceeding forward. Over to you, please.
Thank you, Rahul. At the outset, let me wish you a very warm good evening to everyone, and welcome you all to this conference call of IRCTC for the quarter which has ended on thirtieth September. I hope you and your dear ones are in good health and doing good. Yesterday, company had already submitted unaudited financial results for the second quarter and a half-yearly for the fiscal year 2023, and the same has also been disclosed on both the stock exchanges website, too. I shall give you a brief overview about this financial year post which our Director Finance, who is also CFO of the company, will provide the details of the performance of our business segments, which will be followed by the question and answer session.
In the second quarter of our financial year 2023, IRCTC business model has again demonstrated the resilience which has been there in the past so many months. That is the profit after tax surged to INR 226 crores with, you can say that 42.5% up as compared to quarter, of the previous or corresponding year. The company's revenue in this quarter has also increased to INR 806 crores from INR 405 crores as compared to the second quarter of the previous year. This quarter, in the second quarter of our financial year 2023, the revenue that is INR 806 crores is almost double if we see year-on-year basis. On quarter-on-quarter basis, if we compare with the previous quarter, there is a slight decline due to the lean season.
September is a lean season for us, gentlemen. We shall provide now more color on the same in a few moments when we would be discussing our segmental performance. The most important note is that the revenue from this second quarter of the financial year 2023 continues to be higher than the quarter revenue, which was in the pre-COVID period, and which is very important because the growth has to be compared with that only. All the business segments, except one, saw revenue higher than the pre-COVID levels. The quarter-over-quarter decline in the consolidated revenue was driven by a factor of 5%, where a quarter-over-quarter decline in the catering segment was also noticed because of the lean period which has a corresponding impact on the Rail Neer as well.
You would recollect that the catering segment was the driver for quarter-over-quarter revenue growth in the last quarter of the financial year 2022 and first quarter of this financial year. On the positive side, IRCTC has been able to add slightly to EBITDA margin, which has come up to now 37%, 37.8% in the quarter 2 of the financial year 2023 seeing an improvement of 20 basis points quarter over quarter. As I shared earlier, sir, with the headwinds of a pandemic behind, the travel and hospitality industry now can look forward for a much better fiscal year and beyond. IRCTC business segment can also look up to further improve performance in such industry environment.
I shall now hand over call to my colleague and our Director of Finance, who is also CFO of the company, Mr. Ajit Kumar-ji, to brief you on the financial and segmental performance of the company. Thank you very much.
Good afternoon, everybody, and I hope you and your dear ones are in good health. I shall first give a brief overview about Q2 FY 2023 results, post which you shall have the question and answer session. Q2 FY 2023 revenue saw another quarter-over-quarter strong improvement on year-on-year basis. Revenue of INR 806 crore almost doubled on year-over-year basis given the impact of the pandemic in this quarter. As CMD Madam has already mentioned, due to the quarter-over-quarter decline in our largest segment that is catering, the consolidated revenue declined by 5.5% on quarter-on-quarter basis due to lean period, but still remaining comfortably above the pre-COVID quarterly run rate. EBITDA margin for the quarter came at 37.8%, which implies an improvement of 20 basis points on quarter-over-quarter basis.
The absolute EBITDA and net profit for Q2 FY 2023 is also comfortably higher than the pre-COVID level. Now let us come to the business segments of the company. The number one, the internet ticketing segment, has continued to demonstrate resilience and revenue for the quarter stood at INR 300 crore, growing by 13.2% year-over-year and largely unchanged quarter-over-quarter. The segment has shown resilience with regards to profitability with Q2 FY 2023 EBITDA margin coming at 84.2% versus 84.5% quarter-over-quarter and 83.1% year-over-year. Next, the catering segment, after strong growth in the previous two quarters, has seen a slight moderation in Q2 FY 2023, with revenue for the segment coming at INR 334 crores, lower by only 5% quarter-over-quarter, though on year-on-year basis it grew by 4.7 x.
Also, the revenue for catering segment is well ahead of quarterly run rates in pre-COVID. Lower revenue resulted in EBITDA margin moderating which for Q2 FY23 came at 10.6% versus 12% quarter-over-quarter and versus a loss on year-on-year basis. Importantly, EBITDA margin for the segment is slightly lower than the 11.1% to 11.4% range seen in 9M FY20. The decrease in revenue was due to less passenger travel in Q2 due to lean season as compared to quarter one. Our next is the Rail Neer, which has seen Q2 FY23 revenue come at INR 72.1 crore, which implies a decline of 14.2% quarter-over-quarter and a year-over-year growth of 75%.
EBITDA margin for this segment came at 7.5% versus 11% quarter-over-quarter and 6.8% year-over-year due to increase in pre-form and other petrol material cost, which is increasing now. The next is a tourism segment that Q2 FY 2023 revenue comes at INR 99.1 crore, which implies a decline of 13.9% quarter-over-quarter and a strong growth of 2.6 x on year-on-year basis. Due to a decline in revenue, the segment saw minor loss at EBITDA level as the cost of stay increased as compared to quarter one and less passengers traveled in Tejas in lean season as compared to quarter one. For Q2 FY 2023, the cash and bank balances of the company as of the end of the quarter is 1,900 crore.
The net worth of the shareholders also increased from INR 2,238 crore. It has increased from INR 1,884 crore as on March 31st 2022 to INR 2,238 crores. Now, that brings to the end of the opening remarks. Now we can move straight to the question and answer session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please go ahead.
Yeah, thanks for the opportunity. I have a question on the ticketing segment. Is it fair to assume that full migration with reversal from the reserved to unreserved category has already happened and now the current situation is up to pre-COVID? In that context, can you share what is the convenience fee and number of tickets booked for the quarter?
Mr. Jinesh, your question is that if the pre-COVID level of the class five travel has been achieved. Let me tell you. In this particular quarter, which has ended in September, the sleeper class now has contributed to 46%, and 2S has been nearly 13% average July, August, September. The pre-COVID level, although the total number of sleeper class may be little more than the sleeper class of that time because few more numbers have been added. In this quarter, the overall percentage ticketing has been almost 82% instead of 81%. It is 81.93%. You said the convenience fee. Can you please repeat your second question, please?
What is the convenience fee and number of tickets booked?
In the convenience, the number of tickets booked is nearly in the entire quarter has been 10 CR, 10.69 CR. Average is nearly 3.5 CR in each month. I think that makes the total of 10.69 with the few crore here and there. You had asked about the revenue received in this particular quarter from the ticketing segment, convenience fee. In this particular quarter, we have got nearly INR 200.32 crore, which is at par nearly with what we had achieved in the first quarter. In the first quarter, our revenue was nearly INR 207 crore. Now it is INR 200 crore.
Sure, madam. One last question from my side, and that pertains to the catering business. I think in the last call you had mentioned that you are servicing approximately 1,000 trains. Out of that, roughly, 600 is on the TSP side and balance is pantry. Just wanted to understand how big is the potential here, especially on the TSP side, given the fact that it will not be feasible to have pantry cars in all the trains which have relatively shorter routes. In that context, how should we look at the growth in the catering business, given the fact that we have seen some sequential decline this time around?
Well, there is no decline. You are happy to note that there is increase in this segment as well, as far as the number of trains is concerned in both the segments. In prepaid trains and Gatiman, Tejas put together, the trains where we have pantry car, we have nearly 450 trains. In the train side vending, where we don't have a pantry car, now as on date, 715 trains are there, where IRCTC has been able to place the contract. I think nearly 200 more trains, the tender is in the pipeline, which is going to be finalized within a week or so. As well as the number of trains is concerned, it is going to be on an incremental upside.
Sure, madam. Thank you so much.
Thank you.
Thank you. The next question is from the line of Akshay Bhor from Citadel. Please go ahead.
Thank you for the opportunity. As always, congratulations on the excellent numbers. I think just a follow-up to the previous question. The Indian Railways provides you know a 10-day data on passenger traffic, which suggests that October versus last October is about 30% decline or 29% decline on the passenger traffic. I understand there is an impact of 2S. But just want to understand is the impact of 2S now fully captured in the October data and from here on, you know, whatever the absolute number is, we should consider that number to continue, which is about 59 crore passengers.
Should we 5.9 crore passengers? Should we continue with that kind of trend rate?
Mr. Akshay, I would like to correct you here. Sir, first is the October data we are not talking about in these financials. We are only talking about the September. There is a clear cut demarcation between the reserved travel and the unreserved travel. In the overall data which Indian Railways had published for the 10 days contains the unreserved as well. So IRCTC as of now deals with only the reserved data. So one difference is that that cannot be compared with our figures. Moreover, our figures is only up to September, and there you are talking about the October figure. I don't think so that will be an appropriate. It would be appropriate to compare both the segments at this juncture, because October data I don't have with me as of now.
In October, let me tell you, for the reserved segment, we have festival movement, which is always higher, going to be always higher than the September movement. Maybe in the next con call for the next quarter, if I would be discussing, perhaps we would be talking about that. September is considered as a lean period, which I mentioned in my previous remarks also. October is a festival period. All festivals in the Eastern India, Northern India, and the Western India have fallen in this period. We are going to have a good number. That is why our average goes to that 82% in September. We may see some variation in the month of October.
Since we take only the cumulative figure, so more or less it may become out to be nearly little more than the previous average.
I'm sorry. Let me clarify. This is so the railways also provide reserved versus unreserved, right? We are only talking about the PRS, non-suburban data. My question is that should we assume that from October onwards, the full impact of 2S going away will be visible, from here on? That's my question.
It's a gradual. It has already started from the previous month also. See, earlier we were having nearly 36 to 37 of, at times, 39% of the 2S booking. As now, just now I've informed while answering question of Mr. Jignesh, that figure has now reduced to 13%. The overall earning in the convenience fee in that segment has remained the same. Our revenue from the convenience fee has remained the same. Because in the reserved segment, the bookings start 120 days before. The festival gain which I mentioned in my last, if you recall, the con call which I had for the investors, when we had submitted our first quarter result, I had said we are going to be compensated by the volume gains of the festival booking, which is going to happen for the 120 days before.
That is the impact we got this month, and our revenue from the convenience fee deposits is nearly the same, sir.
Yeah. Yeah, ma'am. It's the same. I agree. But the question is, from here on, should we expect that number to be steadily growing or declining, ma'am?
As I have been mentioning, the temporary gain now has been adjusted and more or less 13% is more or less. If I see the average of all the three months, July, August, September, the figure is nearly 13.2% to 13.1% or 12.75%. Like, the average comes out to be 13%. More or less it is going to stabilize near here and there.
Okay. My second question is, you know, on the catering segment, you're obviously, you know, well ahead of pre-COVID levels and the revenue is obviously higher than pre-COVID. How to think about margins here? I mean, is this 10%-12% kind of margin something that we can work with? Because the margins in both catering and Rail Neer are still below pre-COVID despite the revenue being higher. Just wanted to understand where do we expect margins to settle?
At the outset, let me tell you, Akshay-ji, that the margins in the Rail Neer have been impacted because the petroleum prices have gone up. Because the petroleum prices have gone up, it has impacted marginally preforms from where the bottles are manufactured. It has impacted. We can only gain by volume. When more plants come in, we may gain by that. Most of the plants which are coming up are on the PPP model, where we are going to have very less, nearly negligible expenditure. It's only the capital expenditure we are going to have. Where the catering is concerned, our margins are more or less same. Rather, if we have a long-term contract of 25 years, where we will get more margins.
We are going to be on a positive side in the next few more months to come. Because we are going to have a long-term contract instead of a short-term contract. COVID has almost settled. We can now plan for a long-term contract, and all trains which were in the pipeline, most of the trains have been started. New trains are pouring in. IRCTC has been providing catering in all the trains. Most of the Tejas trains has also been taken into the account. All our tender for the Tejas trains are gradually in the pipeline. Nearly 700 is awarded, 200 in the pipeline, 200 mostly come. It is a continuous process. When there is
Sorry to interrupt. Ma'am, your voice is fluctuating a little bit.
Now if it is okay?
Yes. We were not able to hear the last sentence that you said.
I said the process is going to be continuous, addition of trains, and with the long-term contracts, we may anticipate some increase in revenue also.
Correct, ma'am. There is no change in revenue sharing between you and Indian Railways and catering and Rail Neer segment from the pre-COVID levels, right? Or that remains the same.
No, sir. No, sir. It is going to be same because it is based on an MOU between Indian Railways and IRCTC.
Got it, ma'am. Thank you. Thank you so much.
Thank you.
The next question is from the line of Madhuchanda Dey from MC Pro. Please go ahead.
Hi, ma'am. I have two questions. As you mentioned that, you know, the profitability will improve as you have more of your own plant in the Rail Neer. If you could just highlight the trajectory of capacity expansion and what kind of revenue should we be expecting in the next couple of years as this process happens. I have a second question, which is on the segmental loss in the tourism business. I just wanted to know you had mentioned in your opening remark about the cruiser train. I just wanted to know what contributed to the loss in the quarter in this segment.
I'll enlighten you on this, Madhu-ji. First is the Rail Neer plant. You said the capacity augmentation. As of now, we have already opened our Unnao plant and Singrauli plant. All licensing work has been done, and first two bottles have been produced. We are just refining the quality of the water over there. Once the quality of the water is settled, and because this is a unique kind of a plant where we are making water from steam. It is in association with the NTPC Simhadri. Now, as of now, my capacity, IRCTC capacity is to produce 15.52 lakh bottles a day. Our other plant, Bhusawal, Bhubaneswar, are going to be live this year. We had planned this year, this financial year, they are going to be live.
With this, we would be further adding to capacity of 1.44 lakh bottles. That is going to be making our capacity near 17.5 lakh bottle a day. By the end of 2023 or the beginning of the next fiscal, other two plants will also be there in final commissioning stage. You can anticipate that our achievement of 18.4 lakh bottles a day would be achieved in the beginning of the next financial year.
Okay. That will make you self-sufficient in to what extent? I mean, you wouldn't
We are not stopping here. We are going to appoint a consultant again to review the water requirement because the population has also increased, and this is based on our data, which is two years old. After that, the things have changed. We are again reviewing the requirement at the other locations now.
Okay. Further capacity addition is expected.
Yes. Your second question, why the tourism segment has shown the losses? Well, September is not a month where one goes out on tourism. Generally, it is the period when a lot of fasting and the Pitru Paksha happens. Our main chunk is religious tourism. That did not happen in the month of September. Now, in October, we had a very good movement, and in November also, we are also going to have a very good movement. In Tejas segment also, Tejas may
Customer movement was less. Although the segment was in profit, and overall profit in the half yearly has been nearly INR 9.3 crores in the Tejas. Since the revenue from the Tejas has been less, so it has impacted the other segments also. Although the occupancy in the Tejas was less in the last two months, in the month of September. In October, it has gone up.
Okay. Thank you, ma'am.
Thank you. Participants, if you wish to ask any questions, please enter star and one on your touchtone telephone. The next question is from the line of Ajinkya Parmar from Metaverse Equity. Please go ahead.
Good afternoon, everyone. My question is, Tejas and tourism segments have not performed well during this quarter. Is there any specific reason for that? Increased liability and financial liability is creating additional burden of financial cost, which is impacting bottom line. How management is planning to improve bottom line?
First thing, sir, state Tejas special is not a liability to IRCTC in any manner, because these are the special trains which we intend once we get the request. Most of the state Tejas trains are running on a sponsored basis. The state sponsor that. In the COVID period, when every state was struggling, there was not much activity happening on the welfare side. Now, the states have started and our revenue in this particular segment has gone up. In October, you will see, we have run 19 trains of Madhya Pradesh, which the impact of the same will be seen in the next quarter. September, in any case, is not a time to travel. In Pitru Paksha, Navratri, so many things are there in September. 22 days, very less travel happens and overall figure also goes down.
State Tejas is not a liability, not any cost. It's only a pure revenue gain for IRCTC.
Okay. Thank you.
Thank you. Ladies and gentlemen, we request you to please press star one to ask a question. The next question is from the line of Ayan Bera from Equitreasure Capital. Please go ahead.
Good afternoon, ma'am. I have two questions. The first one is, I want to know about the non-convenience fee revenue this quarter and any overall guidance of non-convenience fee revenue for the whole year. My second question is regarding, if you are able to provide any tourism revenue guidance for the whole year.
If you see the total internet ticketing revenue, the revenue is divided into two parts. One is the convenience fee, another is the non-convenience fee. If I check the half yearly figure of the IRCTC, the total revenue in the half yearly is INR 601 crores. INR 300, INR 300 in each quarter, we can say roughly. In that, 67% of our is from the convenience fee and rest 32%, 32 point some percentage is from the non-convenience fee resources. Out of that, if you see the total non-convenience fee resources, how much is contributing to the total income of IRCTC into the total percentage, 6% is the surcharges for that we are receiving from the various banks, and nearly 12.5% that we are receiving from the agent.
iPay my payment gateway is contributing to my total revenue in the form of the internet ticketing is nearly 5.32%, and advertisement is nearly 6% it is contributing. You can say the major chunk is still with the agent business, that 13% is coming from the agent business, and iPay is also contributing 6% of the total revenue. You wanted to know the roadmap of the tourism. Tourism is all our rail tour packages has been on the track. Our trains are on the track. We have again also started one more segment for Rail Darshan. Our trains are running, our FTR operations are on. Impact will be seen because FTR operation impact is seen in the next month, once we get the entire revenue.
State Tejas, we are running the state Tejas for the three states as of now. Rajasthan, the train is plying. Goa, it is running. Madhya Pradesh, it is going to start again. We operated in the month of October, and we operated around 20 trains for Delhi government up to July. August, September, there was no movement from their side. We are going to operate that also. We are also talking to many states. Rajasthan is also going to add more. We are going to have good amount of business in this particular segment as the time to come in this financial year. As far as our air ticketing is concerned, yes, we have started gaining in this segment. Our segments have improved.
Our business from the budget hotel is also going to improve because new tenders have been decided and two more in the pipeline with the new license fee. In fact, there has been a record collection of license fee in one of the budget hotels, which you will come to know very soon once we discuss the results of the next quarter. All other various packages are also doing fine. Our air package business has gone up, and you will find a good improvement in this particular quarter.
Madam, any tourism total revenue guidance for this financial year upcoming 2022-2023?
Tourism is a choice business, sir. It may jump to any number. Or it may be on a very average kind of a side also. Any negative news in the market, for example, as of now, we don't have any e-Visa. It is impacting inbound tourism in the entire country. Is our train may also get affected. Maharajas' Express and the Golden Chariot. It is tourism is impact of the overall condition of the country. Any news of the COVID will impact it. Any news of pandemic may impact it. It is. You cannot commit on the tourism business. However, we try to make it as much as we can. We are going to operate many trains of the state. You might have seen that we have tied up with the Karnataka State Tourism. Karnataka government also for operating their train. That is also there.
We are also going to have a tie-up with the other state government for operating their train. This business we are going to capture our new operation.
Any, ma'am, EBITDA margin which we expect to generate, any target EBITDA margin we have in mind? Okay. For the tourism segment itself.
Tourism is.
Sorry.
7%-8% margin is working up in this segment. The margin is less.
Competitive.
We don't have any monopoly. We compete with the unorganized sector.
Okay.
It is just like any other tour operator. IRCTC is nothing but just like any other tour operator. The way other tour operators are operating, we have to operate in the same manner, same competitive environment, run here and there, make these packages successful in all the activities. The competition is very, very high. Everyone is doing business. What we are doing, we are doing our best. We are trying our level best.
In this scenario, we can expect 7%-8% margin roughly.
Yes. At least, so that the segment is not in the losses.
Okay.
The impact of COVID is still seen in the tourism. It has not gone from tourism. Because that is a railway business is a different kind of a business. This is a different kind of a business.
Okay. Thank you.
Thank you. Participants, if you wish to ask any questions, please enter star and one on your touchtone telephone. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead.
Yes, hi. Thanks for the opportunity. Firstly, ma'am, I would like to ask about the tourism business. What are the incremental trigger that we see from a growth traction point of view? You already alluded about hotel new licenses. I missed that part. Anything from the outbound travel also, if you can comment on.
The first is the Tejas that is our private train, which has contributed nearly INR 74 crore in the overall revenue of this financial year. October revenue has been up, and we can anticipate that the November, December is going to be good, if nothing goes wrong in the industry. If our occupancy level increase, we are going to gain out of that. If you see our bus segment, hotel segments and the retiring room segments, there also, if the passenger number increases, the retiring room segment always increases. In the hotel, we are going to bring an aggregator. The moment we get an aggregator, our hotel bookings are going to rise. In the bus we are doing pretty fine up to October rather.
We have done a revenue of nearly, I think INR 410 crores or so in the bus alone, up to October in this financial year, and where we have covered 22 states. State transport also we have tied up individually with the 8 state transport also. That segment is also going to do good. The only segment. I don't see any negative point in this because now the season for the travel is come. From October to March, it is the season when we travel. Luxury tourism also our Maharajas' Express is on the track and is still running. Our Golden Chariot will start its first operation on 20th of November. All our other, our deluxe train is going to be on the track very soon. Because things are now improving, we are also going to operate, revive our Buddhist sector very soon.
Hello. Yeah. Okay. Any volume we could give in terms of the air ticketing, what was the seat number in last couple of quarters, and what is the run rate right now?
I can only give you the segment number. Let me check if I have that figure with me.
Yes.
For the air. Just a sec, just wait. Let me see.
Yes. Quarter. Latest.
Yeah, yeah. Okay. Segment booked, if you see in the month of July, August and September, I'll just read out the segment in the each quarter, no? The segment.
Monthly.
In the month of July, we had booked around 129,000 segments. In August we had booked around 139,000 segments. In September we had booked around 168,000 segments. We have also increased our convenience fee from INR 50 to INR 100. Income from booking gross booking amount has particularly been more. Our, I think
INR 5 crore revenues.
INR 5 crore revenues we have registered from this particular segment. Which is a pure revenue commission.
Right. Secondly, on Tejas, what was the revenue utilization, what is the frequency right now, and what are the profitability for Tejas?
Frequency, Rahul ji, has been restored to the previous level. On the day of a holiday, we operated also in the month of October. Our occupancy level in this particular financial year for the Ahmedabad Tejas is nearly 83% and Lucknow Tejas is nearly 73%, 73.9%. Overall, 74%. Overall revenue from both the Tejas up to September 2022 is INR 74 crore. Operating expenses has been to the tune of INR 64.8 lakh. There is a net profit of INR 9.3 crore in the Tejas segment. Had we got more passengers in this, would have been better. But let's see if we can get there this month or the next month.
Yeah. Sorry, I missed the after revenue you said INR 74 crore, I missed the rest part.
Our operating expense has been INR 64.82 crore. Our net profit from this segment is INR 9.3 crore.
Okay. Of course, there's no new tender or about those trains that were to start for privatization. Is there any process that we are also initiating from our end to try and pitch for more private routes?
Sir, as of now, there is no tender or policy from Ministry of Railways. Once they have it, so we'll certainly inform our investors.
Right. Ma'am, in the catering segment, we were to do the lean period assessment. Is that process behind us or is still pending?
Almost completed, Rahul Jain. You will see impact in this quarter, but we will tell them to pay in case there is an increment wherever the increment is, I think, in the last quarter.
Okay.
Because we have to give them some time for payment. The impact will be seen in the fourth quarter only.
So
We have completed the process, and now we will be initiating the invoices if required.
What number of licensees have been now asked for this revised pricing?
It depends on the train, sir. There are few trains, there is a zero increment has been noticed. Few trains have been seen. Few trains it has been on a, I think, decreasing side also. That is not going to impact us because we are going to charge only the quoted license fee. Loss is not going to be there. It is, we have to just sort it out what the sale assessment has resulted into. We'll have to have a consolidation. We are having consolidation. We'll be submitting the results soon.
Right. Right. Okay. But as you just said now, this has now been identified, but the revised pricing advantage we may see only in Q4.
Depending upon case to case basis, sir. Yes.
Right.
We will see in the Q4.
Right. Can we say that now, you know, since most of the business, and I think you also mentioned this in your opening remark, that most of the business now have seen the complete cycle, so as to call it from COVID and pricing hike plus those things are now largely done with. From calendar 2023 onwards, we would see a more normalized picture of the business from all the segments?
Yes, sir. Hopefully, yes.
Right. With, you know, these things behind, what could be the real growth driver other than the usual passenger traffic growth, which may happen in a year now?
As I mentioned that our Rail Neer plant study is we are going to do it again because we are finding it that very soon we are going to have our production level reaching at the optimum level, that is around 18.5 lakh liter bottles a day. We will again do the survey, and we'll find out another opportunity in this business is there or not. Second will be, we would like to increase our non-convenience fee resources to the best we can.
Our commission in the iPay model, our model, as you can see in iPay alone, in this financial year, our business has been to the tune of nearly INR 32 crore is the total revenue and INR 9.13 crore is the net revenue, net profit to the IRCTC. That is up to September. This figure may go up to more than INR 60 crore, INR 70 crore, who knows? We are trying our level best, and our profit in this segment will also go up. We would be targeting any specific points, and then we would also be targeting the safe period another segment. Our election specials are also happening this month. We would have incremental benefit in October, November, December till the time elections are done.
We would be gaining. If we are able to get the BSF, for which we have already signed an agreement with them, BSF movement traffic, we will be gainer out of that also because we would be doing that train. Half of the train will be covered in the tourism segment, half of the train catering portion will be covered in the catering segment. That gain is also going to be there. Hopefully, if everything goes right, the company will certainly do good.
Right. The current output, what is the total unit produced during this quarter?
About the Rail Neer?
Yes.
Just a minute, sir. Capacity utilization has been very good in the month of a summer. In the summer, few plants have done at, as high as 90%. But the overall capacity utilization of these plants, I'm sorry, I don't have figures readily available as of now, but before we close, I'll get you.
Okay. I was just looking.
I got it. 75% nearly is the capacity utilization.
Okay. What is
Few plants we had casualty, like, Jagi Road when there was a flood. At few places there was some issue in the water aspects. The groundwater level had gone down. Those issues keep coming. Put together 75%. We will increase this further. However, November, December, January are the bad months for IRCTC because the requirement goes less. Summer again, from February onwards, it will pick up.
Right. On the CapEx side, can you share the CapEx for new office, and also, the other CapEx that you plan for next year?
INR 250 crores we have to pay to NBCC for acquiring our new office, which we have to pay in the phased manner. Our first two installments are gone. That CapEx continues to be there as per the plan given by NBCC. Secondly, we have already started giving tenders for doing our, one is the regular expenditure and another is for the capital expenditure in the internet ticketing. We are completing our upgradation in the internet ticketing. That plan is also on. For that, we had anticipated INR 100 crores in my first quarter con call, if you recall, out of which we have already spent some amount and some amount is still due, which we are going to close very soon.
Okay. Last question from my side. Any specific reason why the depreciation charge has gone up from INR 13 crore to INR 18 crore in this quarter?
Due to new addition, lease accounting, new assets.
Oh, we have some, as per our advice of our auditor.
ROE.
Uh, I think I
Right.
This question will be answered by our finance guy who will be better because he has done it.
Rahul, because of this quarter our ROEs increased, because of the new leases added in this our quarter now. Because of that depreciation has increased.
Sorry, I could not understand. ROE increased for?
Whatever the lease assets we have to account it as an asset of the company, right? As per the accounting standard. Whatever the lease charges we have paid for our leases, we have to account it as an asset of the company. Accordingly, we have to account for the depreciation and interest on that. This is a requirement of the accounting standard actually.
Okay. That's it from my side. Thank you so much for all the answers.
Thank you.
Thank you. The next question is from the line of Uday Nagireddy from Individual Investor. Please go ahead.
Yeah. Hi. Good evening.
A very good evening.
Thanks for allowing my question. My question is about, you know, is there any plan in the future to increase the Rail Neer price, bottle price? I think, since very long time it is only INR 15 only.
Look, these deliberations are on in our company and we are doing some cost analysis. Let's hope for the good. Till the time it is done, it is not there in the market and we cannot comment upon that because you know these prices are administered prices. Since the platform prices are going up, it calls for the idea that we should recommend to the Ministry of Railways for increasing the price. These deliberations in the company is already on. We have already discussed this matter, among ourselves. Let's hope for the good.
Okay. Thank you. That's all from me. Thank you.
Thank you. The next question is from the line of Akshay Bhor from Citadel. Please go ahead.
Ma'am, just want to clarify the previous question. You're saying for the Rail Neer, if you have to increase prices you have to go through the Ministry of Railways and hence sort of get an approval from them to increase the prices. Is that correct?
We can only deliberate internally and we can only decide whether what should be done. We are deliberating internally. In any case, these are, as I said just now, the pricing for the Rail Neer are administered by Ministry of Railways. We'll have to go to Ministry of Railways to get the approval and decide on price decision.
Ma'am, just to clarify, similarly on catering as well, if you have to make any changes to the pricing or to the contracts,
Yes.
It has to be approved by the Ministry of Railways, yes?
Yes, sir. We have from DRHP onward, we have been mentioning all this, that our pricing in the catering front, in the rail meal front, is decided by our ministry, parent ministry, that is Ministry of Railways. It is only in the convenience fee IRCTC has been given a flexibility, where BoD of IRCTC can decide the convenience fee to be charged from the customers.
Ma'am, just one last question from my side. We know that, you know, all your tickets ultimately get booked on the IRCTC platform. I just wanted to know what is the share of third party initiation of booking. So let's say if somebody initiates the booking on MakeMyTrip and what is the percentage share of such bookings which are originating from a third-party website.
It would be initiating from the third-party website, but finally it would be coming to me as my B2C partner, right? In this B2C
Right, ma'am. Yeah.
In this B2C partner, our charges are high, and we charge not in addition to convenience fee, our convenience fee, which is INR 15-INR 30 in the normal case, and a little concession for the UPI payment. We charge INR 10 per ticket more from them.
Right, ma'am. Just wanted to know what is the rough percentage of such tickets getting booked?
It is nearly, I think, not more than 25%. 20% should be there.
Okay.
Even less.
So
I'll get you the exact figure before we close.
Okay, ma'am. Thank you.
Thank you. Final participants if you wish to ask any questions, please enter star and one. The next question is from the line of Justin Juneja from Cove Value. Please go ahead.
Thanks for the opportunity. Ma'am, I have two questions. One is, you said that, the internet ticketing is, pricing is for convenience fee is in our hands.
Mm-hmm.
I think it's INR 15 and INR 30 seems to be very low. When are we likely to revise this? I think.
Not in the near future, sir. Not in the next six months to come.
Okay.
Because we have just passed through the bad phase of COVID. Still, our effort should be to maximize our non-convenience fee resources and the other resources. Let's not put more burden on the customer.
In the long term, can we expect
This is in our board hands. Our board is competent to decide on this matter. We do have internal deliberations happening in our board on this issue also. As of now, we are in the unanimity. We are of the opinion that as of now, we may pend it for some time and let the industry restore to the maximum.
Okay.
The travel and tourism, as I mentioned, in the tourism sector, things have not restored completely. Things are still hanging around. Many people have lost their job. COVID has been very bad as far as the travel and tourism is concerned.
Okay. We are not charging any convenience fee for UPI payments?
No, we do charge. Like our normal convenience fee is INR 15 and INR 30. INR 15 for the sleeper class, INR 30 for the AC class. It is INR 10 and INR 20 for them.
Okay. What is the percentage of UPI bookings versus the total?
33%. 33% is the booking.
Okay. My last question is, we had applied for
Oh, sorry. Let me correct, sir. It is 27% is the booking for that. In the month of August, it was average is 27%, but it has been nearly 33% from April to September.
Okay. My last question is, we had applied for a license of payment aggregator with RBI payment?
Yes.
What is the status on that?
For that, RBI had asked us to make certain changes in our MoA. Those changes have been approved by our esteemed shareholders in the AGM. After that, all documents have now been submitted, and our consultant has also been appointed in the matter, so we are pursuing that further. Maybe we may get good news soon. As soon as we are done, we'll inform our investors.
What should be the impact of this on the revenue and margins?
I just mentioned in answering one of the questions that iPay is a very good option. See, iPay as of now we are operating only as a PG. We are not operating that as an aggregator. Only in our system, because we don't have a license of that. In the six months of this year, we have been able to earn around INR 32 crore of revenue, out of which INR 9.13 crore is the pure profit. This is the half yearly figure I have. Merely in the year, if we count the figure to be doubled in the year, maybe a little less, we would be ending nearly around INR 60 crore or so. Our revenue will be nearly, I think fifteen to some, somewhere between seventeen to eighteen crores.
This is when we have only the PG. If we have the aggregator come up as an aggregator on our website alone, and the way we can go outside our website also, this is definitely going to add more business, and getting us from the transaction.
Okay. Thank you, ma'am.
Thank you. As there are no further questions, I now hand the conference over to the management for closing comments.
It has been a very thought-provoking session, and our first quarter has been good. Our second quarter has been more or less the same, with slight changes, with certain segment getting affected. First quarter was very good because we were comparing with the bad time. Second quarter, we are comparing with the good time. If you compare with the quarter of the previous year, we have just certainly done very nice. We are hoping that investor will continue to have a same relationship as they have earlier and keep showing their faith in the IRCTC in the times to come. Let's hope for the good and wish a good, very good for the company. With this, I wish you all the best in the days to come.
Thank you very much, investors, and just stay with us. Thank you.
Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.