Thanks, Rajan. Good evening, everyone. On behalf of IRCTC, I welcome you all to IRCTC's earnings call for the fourth quarter and year ended March FY 2020.
Yes.
We apologize for the inconvenience caused because of the slight delay on the call. On the call from the company, we have the management represented by Shri Mahendra Pratap Mall, Chairman and Managing Director, Shri Ajit Kumar, Head of Finance. I'd like to thank the management for giving us the opportunity to host the call. I will now request Mahendra sir to give a brief on the company's performance for the quarter and the full year. Post which, we shall have the Q&A session. Over to you, sir.
Good afternoon, ladies and gentlemen. We had our accounts passed today by the board of directors. As you are all aware, last quarter result, which we have finalized today. Of course, this impact of COVID was felt maximum on hospitality sector and travel sector. Our business is primarily travel-oriented, whether it is train booking, air booking, or catering, packaged drinking water. If I mention about last quarter, Quarter Four, the total revenue was INR 607 crore as against INR 734 crore in Quarter Four of 2020. There was a One second. Where is the total? Where is this? Just a minute, please. Yes, sorry. For Q4, total operating revenue was INR 587 crore as against INR 498 crore of last year. There was a drop in catering, and it was INR 236 crore as against INR 295 crore. Rail Neer similarly, was INR 51 crore against INR 43 crore.
This was primarily on account of commissioning of more and more plants. Ticketing was INR 194 crore as against INR 66 crore last quarter. It was primarily on account of imposition of service charge in September onwards. Tourism, there was increase from INR 83 crore to INR 102 crore. Total revenue, estate sales had gone down from INR 11 crore to INR 4 crore, and total operating revenue was INR 587 crore as against INR 498 for Quarter 4. Now, more important is annual results. As far as annual result is concerned, our total operating revenue has gone up by almost 20% from INR 1,870 crore to INR 2,275 crore, which is an increase of 20%. Overall profit has gone up. Where is the Quarter 4? Where is it? This is PBT.
Yes.
The profit before tax has gone up to INR 745 crore from INR 479, and PAT has become INR 524 crore against INR 308 for last year, which is an increase of almost 70%. Increase in turnover of 20% and PAT of 70%, this is primarily on account of imposition of service charge on internet ticketing, which has given this kind of profit. As far as dividend is concerned, your board of directors, they have declared a dividend of 125%, that is INR 12.50 per share with a face value of INR 10, out of which 100% has already been given as interim dividend. INR 2.50 more will be given. Is there anything else? That is all. I am open for any questioning.
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 handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one.
The first question is from the line of Nitin Gosar from Invesco Mutual Fund. Please go ahead.
Hi, sir. Good evening. Couple of question. What would be the online ticketing booking that happened for FY20, and what would it be as a % of total booking?
Online ticket booking on an average is about eight lakh tickets per day. This was pre-COVID period.
Right. This was almost 72% of total reserved seat of Indian Railways.
Okay. Got it. Sir, second question is pertaining to what's the overall thought process when it comes to commencement of the operation to normalcy? I very well understand that COVID is not the environment will not allow you to permit at a normal level. What would be the thought process? What would be the key indicators which will indicate that from here on, things will only improve in terms of tapping the services to normalcy?
Now, this is a question, it much depends on the situation and further progression or reduction of COVID, and in general, atmosphere of well-being in the nation where people will start again traveling.
As far as ticketing is concerned, perhaps it will go up because people will avoid now taking a ticket from windows.
Tourism, yes, it will take some time because as you are seeing today, people are trying to avoid travel.
Even if somebody has to travel, normally they are preferring personal mode. Tourism may take maybe six months or a year from now to pick up.
Similarly, catering also will suffer for some time because now there is a different and scaled up new normal of hygiene.
Maybe there is a talk that instead of this type of packed, this cooked meal and all that, we could start more and more ready-to-eat meal, but then acceptability of ready-to-eat meal in a long journey is always in doubt. Ready-to-eat meal for one meal, person can eat, but not perhaps beyond that. All that we are exploring, but yes, certainly things will change, not only for IRCTC, but overall as a whole.
Yes.
We are tuning ourself to that kind of situation. Like currently, most of our hospitality supervisors and staff, they don't have much of work. We, in association with ITDC and two, three other professional agency, we are imparting them a training for next level of hygiene. Next level of hygiene for customer and a protection for them also, so that as and when number of trains increase and volume increases, they should be in a readiness to handle this kind of situation.
For us to start the train operation, it will all depend upon the government say. What I came to understand is the central government going to play a key role in this.
Of course, Central Government will also start the trains, increase the number of trains depending on the demand.
Like currently, I think 150 pair of trains are running.
Average occupancy is in the range of 60%-70% roughly.
It means it will take some time.
Okay. When it comes to cost, how are they placed? Which will be fixed cost within hold down, and what are the variable costs approximately for that?
Maximum fixed cost is in form of employee cost.
Because it's basically like any service sector, it's not asset-heavy organization.
Right.
Basically, employee cost is more or less fixed cost. I mean, major part of it, say 90% of it is fixed cost, 90% or 80%.
That will continue, and we don't have any major asset
Our employee cost for the year total is about INR 200 crores.
Out of that, roughly INR 20-25 crore, which is about 10%-12%, is again variable. It's basically contractual employee or outsourced employee, the employee that can be controlled.
Another 10% cost which we can control. That we are trying to do something.
Got it, sir. Sir, one last bit on private train operation, which has been found in news for a week.
Who will do the ticketing booking in private train operations?
I think it is mentioned in RFP that IRCTC will do the booking.
Mm-hmm.
Portal will be our IRCTC's portal. Obviously, business-wise also, it does not make any sense for any train operator to create a new portal and booking system, booking engine for eight, 10, 12 trains. It will not be viable for them.
Got it.
Their service is available at some nominal charges from another organization.
Right. Got it, sir. Would it be prudent for us to believe that right when we were invested in servers to enhance our booking capacity, that we continue and backseat our investment that we were planning to keep technically to backseat?
For some time, yes.
Got it. I have more questions. I'll stand by till the end.
Okay.
Thank you.
Thank you.
Got it fully.
The next question is from the line of Manish Poddar from Nippon India AIF. Please go ahead.
Yeah. Just on this capacity, which is 150 pairs.
Would you be able to help, how much of the INR 150? Just to understand the actual details first.
You are talking about private trains?
No, general trains. Right now, when you are running, booking for 150 beds of train.
Yeah
how much is this booking?
This is around 10%-12% only.
Okay. For right now, let's say in this till August.
10%-12% of reserved train category. If we take overall the passenger and suburban train, it will not be even 2%. Normally, we are booking only for reserved category, reserved trains. It is about 10%-15% only.
Okay. Another question is, during this lockdown or unlock, there have been certain different mechanism. First is on the ticket booking, probably which is being done by the center. Second is on the meal and water being provided in this interim. Probably, could you explain how does this mechanism work, and what is the pricing for this? Just trying to understand. Shall we incur any loss in this business or this is a no profit model?
Let us take business. Which business? Catering, you are saying?
Yeah, the three businesses. Catering, water-
In any case, we have our software, we have our servers in place, system is already working. Manpower is also there. Whatever booking is done, it's a revenue for us. It's not a loss situation for us. We are getting revenue out of it. Out of that fixed expenditure only, there is no variable expenditure. Hardly any, two, three, five, maybe maximum 10% variable expenditure linked to catering.
How about food and water?
Water is, of course, still volume is low. What we do, since the food is not normal food, we have invited temporary tenders for these trains. We get a license fee. Our condition is that cooked food will not be served in the trains. It will be only packed and ready-to-eat branded meal and Rail Meal. That is being sold by them on which they earn a margin and pay us license fee, which is decided on a transparent bidding process.
Would it be fair, let's say, just on this catering food, whatever margins you were considering will be?
No. Volume is much less.
Yeah, volume and ticket size will come down, but the margin, so let's say instead of giving 150 meals, you are now giving 50 meals, for instance. The margin earlier to the license-
Earlier, all these Rajdhani, Shatabdis, these were prepaid trains where food was part of the fare. Now there is no such train. Everything is available on sale. Right?
Right.
Margin-wise, whatever our PPP partner is getting, he is giving a license fee out of that, which is much less compared to a regular train.
Okay. Just one final one is that, these trains which you were running, the Goa one and the one Delhi. How does the economics one work right now? Because ideally, these trains will not be running. Do we incur the fixed cost for running those trains still?
We had taken these trains on lease from Railways. In the light of force majeure issued by Ministry of Finance, we have requested Railway Ministry to waive the lease charges, as these services are not there.
Will you be able to help, till what period is this?
What?
This lease waiver you say, this will be applicable till the government-
Till there is a demand for trains and till the train operation starts.
Okay. Got it. Thank you.
Sure.
Thank you.
Hello.
The next question is on the line of Jinesh Joshi from Prabhudas Lilladher . Please go ahead.
Hello.
Yeah.
Thanks for the opportunity. I have one question on the license fee catering business that you conduct. Now, if I understand it correctly, the licensee paid us the money in advance, and in lockdown, obviously, his sales would be negligible. In fact, even after the operations begin, the sales would be quite low in the initial few months as the tendency to eat out may be a bit less. Basically, what I want to know is that will we have to compensate the licensee in any way for the period? I mean, from advance money which we have received or will his term be extended? Basically, how is the nature of agreement in that now?
See, what we have done, since we have collected the license fee by offering him an opportunity to sell Rail Meal in trains. Right?
Right.
For the lockdown period when there were no trains.
We had to because licensee also has to maintain a minimum of permanent staff on roll for them.
Right.
What we have done, we have returned the license fee which we had collected in advance.
for the lockdown period.
Okay
His liquidity is ensured for payment to his staff. That is number one. The moment normal services are restored, he is supposed to pay us the license fee, return the license fee within one month. If he pays within one month, his contract will also be extended by the same tenure. If he does not return it.
Contract will not be extended.
Okay.
Now that during current period when the scale is much less, obviously nobody will work on that license fee.
For this period when, of course, these entire terms and conditions of the tender and contract have changed.
We have invited fresh bids for a limited period of two months, extendable by another two months.
for doing this limited service. These special trains which are running currently. These are not regular trains with those numbers for which contracts were signed.
Fair enough. Secondly, in case of tourism business, what I want to know is that, is there any minimum guarantee component that we have to pay to Indian Railways or the haulage charges are paid on a usage basis? I mean, basically, will there be any cash outflow for us during the time our tourism operations are shut? That is what I want to know.
Haulage is payable for the trains which we run, that is Maharajas' Express and Golden Chariot we had taken, and these two Tejas and one Kashi Mahakal Express. Right?
As I mentioned in reply to earlier question, there are two type of fixed cost. One is the lease charges on which Railway has given the rolling stock to us, and haulage has a fixed component and a variable component.
We have requested Ministry of Railways to waive the fixed charges as well as lease charges, treating it as force majeure.
Okay. Fair enough. Sir, one last question. I mean, with volumes of tickets falling during lockdown, has the deposit that we maintain with Indian Railways has also come down correspondingly?
Yes, certainly.
Okay. Can you please share what was the ticket or what was that figure as of March and what is it today?
Sure. Pre-COVID, let us not talk of March. Pre-COVID, we were issuing tickets worth about INR 60 crores per day.
Okay.
Right? This money used to come back to us in T+2 days, and we had to keep a margin of one day, so we are maintaining a balance of almost INR 300 crores with Railways.
This has come down to almost INR 13, 14 crore per day. We would be maintaining a balance of about INR 60, 70 crores with Railways.
Okay. This privatization opportunity that is being spoken about, will we be required to invest in the rolling stock or our participation will be limited to just managing the operations, what we are doing currently?
It depends on what model we adopt. Obviously, whether we tie up with anyone, because our expertise is in operations.
There has to be another partner whose expertise or who has knowledge of rolling stock and maintenance of rolling stock.
In every business, some financier comes in, either IRCTC comes as a financier or rolling stock manufacturer comes as a financier or third party comes as a financier. It will all depend on the structuring that we go for. It is still not decided.
Okay, sir. Thank you so much.
Thank you.
Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead.
Yeah. Hi, sir.
Hi.
My question is for the Rail Neer business. What are the dynamics now here? Because of course the volume would have come off significantly. How we are compensating the PPP partner and what are the fixed costs that we have to bear on this plunge?
In our PPP contracts, there is a clause whereby we give them a commitment of picking a certain volume of water. If sale or picking of water from that plant is above that, we give him incentive. If it is below that, the mechanism is already there in the contract with him. We compensate them for the volumes which we have not lifted. Per bottle, there is a compensation. There is a mechanism. We will pay as per that.
Okay. What would be this component on an overall basis, annual basis?
It will depend how long this situation continues. It will depend how much less water we are able to lift from the plant.
Right. Let's say this INR 170 crore of annual cost we have in Rail Neer business. The significant part toward that fixed that we pay toward the procurement.
Yeah.
That part reduces with the volume. What % is bare minimum cost that we need to cover up? Is that a significant number or only?
No, it won't be significant. It will be, [Foreign language] per bottle? Compensation [Foreign language] INR 0.10 [Foreign language]? It is not significant. It's, I think, INR 0.10-INR 0.12 per bottle.
Okay. That's quite lower.
It is quite lower because we have given him the support for setting up a plant also. For the lockdown period, we will extend the contract also by that period. All those, that care we are taking to make the contracts operational and not exploitative.
Right. You obviously gave idea in terms of some cost. Right now we have INR 400 crore cost. You said the big part of the fixed cost is the employee cost, which is INR 200 crore.
Yes.
And in that-
INR 200 fixed cost will be about INR 170. Because employee also, there's a variable component, contractual employee and all. Of course, we continue with all the employees, but yes, certainly once situation improves, we'll review it. Fixed component will be anything between INR 170 crore-INR 175 crore.
Right. Right now we have the opportunity to save maximum INR 30 crore in the overall cost basis. Is there any other non-employee related cost where we could deploy some cost-saving measure?
What we have done, for future, we have done an analysis and all the controllable portion we are trying to control. As I mentioned in answer to one of the questions, we are not asset-heavy organization. Many things are controllable, and we are trying to reduce it. Majority of our cost is directly revenue linked.
Right. Just last one bit from my side, in terms of course, Rail Neer business, catering business, and internet ticketing business can pick up the moment more train starts, gets on its demand and the COVID situation. Tourism, which is more of a discretionary thought. How long do we see some resumption on this, or have we completely taken out all our plans for this fiscal in terms of all these luxury train that we run? Till what period we have already canceled the travel plans?
This luxury train starts sometimes in October. We have not canceled it so far, but we will see till August, and then maybe tours up to December, we will cancel month by month. We will not cancel the entire year at one go. We'll see how the position improves here. This is something which is nobody is able to predict.
Right. People have option of complete refund at any given point?
Yeah. All that flexibility we are giving.
Okay. Thank you so much, sir. That's it from my side.
Thank you. The next question is from the line of Soumitra Chatterjee from Spark Capital. Please go ahead.
Yeah. Thanks for the opportunity, sir. I have three, four questions. The first one is, trains were canceled from 15th of March. When we refund the booking, do we have to refund the internet ticketing charges also, or that is not to be refunded to the passengers?
No, because ticketing is a service extended. Travel takes place or no? Service of ticket booking has been given to the passenger
Okay.
That convenience fee or service charge, whatever you may call, is not refunded.
Okay. Till about 1st of September 2019, when we were not charging the convenience fee, the government was reimbursing IRCTC to the extent of cost for this revision.
Yes.
Is there any clause where government will be reimbursing for the cost of this revision? We are not booking any tickets right now. There are no revenues per se. I mean, except the government-run trains that are running.
No, I don't think it will be proper for us to ask government for this because this is a business risk.
Okay.
That time it was at government's instruction. This is a business risk which all business is facing.
Sure. If you can just update us on till about February, what was the revenue and the profitability run rate of Tejas Express, both of them, the Lucknow-Delhi, Mumbai-Ahmedabad, and the Mahakal Express also till about end of February? What was the revenue and the profitability?
Profit, when we started this Lucknow Tejas in October.
Yes.
The projection was that we will break even in year two.
Okay.
This train ran till about middle of March, 15th or 16th March we had closed. Till that time it was about to reach the break even.
Okay.
Right?
Right.
Mumbai had done just one month. Mumbai was started on 14th or 15th.
17 January.
17th January. It ran for only two months. Yes, that Mumbai response was much better, and it was also nearing break even. Mahakal ran for only 15, 20 days. All the three trains combined, if I mention, we incurred a loss of about INR 2 crore. That was primarily on account of advertisement and marketing expenses, which was paper ads in inaugural run and all that.
Okay.
If we spread it over the year, over two years, three years, perhaps we would cover it.
Sure. Thanks for that. Sir, the last question is on the privatization of the trains, which is currently under the proposal. While any private operator will be using your portal to book the tickets, so the private operator is free to use his own people for the catering services? Is that correct?
Yes.
Okay. If you participate in this proposal, will IRCTC will have to create a separate subsidiary because a new partner needs to come in for rolling stock, IRCTC will be there for operations, and a financier will be there? Will it be different subsidiary altogether, which would be managing that particular operation?
That is yet to be decided. There are various options. Even as IRCTC, we can always take rolling stock on lease from some financing company, engage a company for maintenance services, engage a company for onboard services. That is one extreme, that we can do it. The other extreme is that we tie up with private players either as a joint venture or a subsidiary or SPV, whatever. It is still not decided. We are weighing various options, and then we will come out with whatever is felt best.
Sir, one last question on the catering side. In the month of January, the railway had hiked the breakfast, tea, lunch, and dinner charges. From mid of March, anyway, the trains are not operational. Is there any plan to roll back the hike that was done given that majority of the trains, the government would be trying to lessen the cost for the passenger?
There's no plan to roll back the cost. In fact, rates were revised sometime in month of November.
Yes.
This was implemented for all the trains which are on closed stage, where food is sold and bought. In pre-paid trains like Rajdhani, Shatabdi, Duronto, this was to be effective from 28th of March. There it is part of the price of ticket, and ticketing is done 120 day in advance, so there was a margin of 120 days for implementing this revision. In Rajdhani, Shatabdi, it was not implemented. There is no plan of rollback. Yes, there is a change in perception about hygiene and all this, so we are working on it. Let us see what comes out.
Sure. Thank you so much, sir.
Thank you. The next question is from the line of Mukesh Oswal from Nirmal Bang Securities Private Limited. Please go ahead. Mr. Manish, your line is in talk mode. Please go ahead with your question. Mr. Manish, please unmute your lines from your side. As there is no response from the current participant, I have muted the line. The next question is from the line of Jeevan Singh from Individual Investor. Please go ahead.
Hello.
Hello. Yeah.
Yes, we can hear you.
Hi. This is Jeevan.
Hi.
Hope you and your family are doing good during this situation.
Hope the same for you.
Yeah. Thanks for inviting me and good to hear that result. I just wanted to know a couple of things. First, obviously there is no prediction as to how much it will long last, this COVID situation. There are some ballpark things, which as it is, for next 1 quarter, 2 quarters, how much revenue can go down or something like that. Did we do all this analysis? The second thing, is there any impact in CapEx plan for the future or any new ventures and everything, or new tie-ups, is any impact on this due to this lockdown and all this revenue? This is all the two things which I want to hear. Thank you.
First thing which you mentioned, frankly speaking, nobody, even if the best of research institutes in world are not able to predict. Like this MIT study, which says that there'll be 3 lakh cases per day in India. One study is there, and then there's another study. ICMR made one study that it will peak in November. We are just tackling the situation as it is coming. We are trying to rationalize our operations in such a fashion that our cost minimization is done, and whenever we're getting any opportunity, we are going for the business. The second question about CapEx, yes, it is partially, yes. Some of the plans we have deferred, especially relating to tourism, where we had planned to buy two, three trains for our Mukhyamantri Tirth Darshan Yojna and the State Pilgrimage Special.
Because of two reasons that obviously the state's financial situation will also not permit them to promote this, and secondly, tourism as such will be most affected. We have deferred it. At the same time, some other projects like Lucknow hotel, we have just bought a land at Kevadia where Sardar Patel's statue is there. We got approval for purchase of land for a four-star hotel in Lucknow today only. Such things are going on, which will materialize after some time. The CapEx which was to result into business in short, rarely we have withheld it.
Okay, got it. Thanks. Thanks for the info. Wish you good luck for the future.
Of course.
Thank you. The next question is from the line of Pratik Khedi from Emerge Capital. Please go ahead.
Hello.
Yeah.
Hi, sir.
Hi.
Thanks for the opportunity. I was just wondering that will it be possible for you to give me a breakup of this INR 1,264 crore revenue which combines catering and railway. How much of it comes from Rajdhani and Shatabdi trains, sir?
Yeah.
Will it be possible for you to give me the breakup?
Yeah. See, Rajdhani, Shatabdi train, there are two streams of revenue.
Okay.
One is the cost of food, or price of food rather, which our licensee supplies to passenger and then bills us, and then we bill to railways. Right. That revenue is about INR 500 crore for all these prepaid trains. Second stream of revenue, when we invite a bid for these trains, these trains are allotted to bidder who has quoted the highest concession fee for five years. There's a component of annual five-year concession fee, which is paid in three installments. That is another component. From Rajdhani, Shatabdi is INR 500 crore revenue is out of sale price of food, and about INR 75 crore-INR 80 crore for all the trains, Rajdhani, Shatabdi, Duronto, is on account of concession fee that we get for allotting that train to a particular bidder.
I get it, sir. My question actually comes from the fact that in next five or seven years, if we assume that Indian Railways will outsource the Rajdhanis and Shatabdis to private players, is there any threat which is hanging around our catering business and railway revenue, which we are getting from Rajdhani because these are the routes or these are the trains which will be first handed over to private players?
No. There's a slight misconception. As per current policy announced by Ministry of Railways, there is no question of handing over these trains to private operators. All the new trains which have come up, these will be additional trains. Of course, it will have some impact on the occupancy of train, but it is a different story.
Right now, there is no plan to hand over these trains to private operators, which is number one. On account of reduced occupancy, yes, we might lose something. We have our plans of entering into private trains, which will give us a much higher revenue.
Fair enough, sir. My other question are answered. Thank you a lot.
Thank you.
Very good luck.
Thank you. My name is anyone who wishes to ask a question, may press star then one. The next question is from the line of Nitin Gosar from Invesco Mutual Fund. Please go ahead.
Hi. Thanks for the opportunity again. A couple of questions, more specific. Online booking has two, one is IRCTC for reserved one and UTS for unreserved one, and both are backed by CRIS. Can IRCTC pay for UTS and bring that business to [CRIS code]?
In case of reserved ticketing, there is a service charge that we levy.
UTS is normally unreserved ticketing segment, which have a low ticket value.
Charging a service fee on low ticket value, perhaps Indian Railways does not consider it appropriate.
Of course. We did not agree for giving the service without any service charge. Because we are a commercial organization.
Yes, sir. Keeping in mind future of technology is data, and you will get access to lot of data if you start participating in UTS. You can bring lot of advertisement and other sources.
UTS, you will not get any data because there is no detail about the person who is buying the ticket. Anybody can go and buy a ticket. There is no form to be filled about his name, age, and all that.
Yeah.
It's only two tickets from Mumbai to Panvel.
Yes, login ID has data.
Anybody can travel on that. It is not person specific. As such, there is no data linked with UTS tickets.
Right, sir. Login ID would create like data which is linked to a login.
Login ID will, yes.
As of now, there are no plans or it can be reevaluated?
Unless it becomes a business for us.
We have no plans.
Okay. Sir, second question is with regard to Neer business. I think you had a press release couple of weeks back, where you did mention that you are evaluating opportunity to sell the water bottle outside railway station. Can you throw some light on that business opportunity? How temporary is it or is it a permanent thing that you are looking at?
See, currently we are meeting, if we take pre-COVID period or normal period, we were meeting about 70% requirement of Indian Railways. Our primary duty first is to meet the 100% requirement of Indian Railways so that all the stations and trains are covered with Rail Neer, and no other water is sold on them.
Once we would have reached that stage, we could think of it. That is number 1. This press release, what you are talking is that currently all our plants are either closed or running at much less capacity.
This was an idea at least to meet the fixed cost if we could sell it in the market. Market has its own dynamics. Packaging water generally is a forced sell by the retailer. Retailer generally sells the water which has the maximum margin.
Right.
Our average costing of water is slightly higher for simple reason that our 100% water is tax compliant. I should not be commenting here.
We have to compete with a lot of unauthorized players. There this battle of unethical competition comes in. Still we are exploring it.
Got it. Sir, once the train starts to normalcy, booking starts again, would government reconsider the ticketing charges which are right now available to you, that is INR 15, INR 30? Would they review it and try to bring it down lower? Any thoughts on that?
Why should they? They have given IRCTC full freedom to fix the rates. There is no rationale and logic by which they should play with it now.
Got it. From IRCTC's end of view, are they looking IRCTC as a company which can invest in fixed assets going forward or maybe replace certain investment which Indian Railways is incurring on its own, like participating in private trains or probably investing in Vande Bharat?
Indian Railways cannot think of putting any, or any government department cannot think of any PSU for investing in assets of a ministry. As PSU being independent commercial organization like train you mentioned, then we will enter as a business proposition, not as investment for Indian Railways.
Mm-hmm. Got it, sir. Thank you.
Thank you.
Thank you. Reminder to the participants, anyone who wishes to ask a question, press star and one at this time. The next question is from Ankita Shah from Elara Capital. Please go ahead.
Yeah. Sir, you mentioned about the fixed lease charges that we have to pay for locomotives. I wanted to check how much is that fixed cost?
No, it is not fixed charge for locomotive. It is fixed charge for the coaches which we have taken for running these three private trains.
Correct.
This lease charge is about INR 7 crore per train per year.
Per train per year.
I mean, it could be anything between six to seven.
Okay. Basically, you mentioned that for all the new or private trains that will be operated, no Rajdhani, Shatabdi or existing trains will not be privatized. These will be completely new trains that will be operating on the current route.
This is what was mentioned by Chairman, Railway Board in his press conference earlier. I'm presuming it.
Locomotives or the coaches have to be bought new and they will not take it from Railway.
That modality is not yet decided. I mean, they can buy it from any source. It could be one of the railway production units. That all this is not decided. The type of rolling stock, how modern the rolling stock will be, that is defined.
Okay. Got it. Sure. Most of my other questions are already answered. Thank you very much.
Thank you. The next question is from the line of Rajesh Vora from Jainmay Venture Advisor. Please go ahead.
Good evening, gentlemen. Congrats for a pretty good set of numbers despite COVID. The revenue decline in the internet ticketing business was about INR 58 crore between December quarter and March quarter. The ticket decline was around INR 40 crore. How many days of business did IRCTC basically lose in this fourth quarter?
Fourth quarter, the impact of COVID, we started feeling from January itself when the travel volume was reducing.
Okay.
Finally the trains were canceled from, I think 22nd or 23rd of March. Many trains, like we canceled our Tejas from 17th March. Volume was very low in the month of March, almost 50% of the regular volume. The downward trend had started from January itself.
Oh, okay. Despite that, you have done pretty well on the margin. You haven't let it decline significantly.
Indeed. I mean, largely in internet ticketing, it is basically the fixed cost of server networks and software maintenance and manpower, which is a certain percentage. That remains as it is.
Sure. Interestingly, the catering side, while the revenue decline was there from INR 259 to INR 246.
the ticket margin almost remained flat around INR 29 crore.
Could you give some idea on that business? What was the impact then as you explained to the internet ticketing in the fourth quarter?
Again, for catering also, this impact of reducing number of passenger was there, but margin was there because we changed the working model also.
Okay.
Meaning what was the change?
I mean, earlier, there were many trains which were outsourced on PPP model. Instead of running them departmentally where our own men were running and we were getting lesser margin, and it went on PPP mode and we started getting license fee and other charges. This rationalization of working model resulted in margins remaining the same.
Okay.
In some trains, license fee was increased by about 10% for trains covered under respective bidding document. It was primarily on that front.
Okay. Thank you so much.
Thank you.
All the best. Ladies and gentlemen, we'll take the last question from the line of Priyank Chhaya from Standard Chartered Securities Limited. Please go ahead.
Yeah. Hi. Thanks for the opportunity.
Hi.
Just wanted to know the data point, for this quarter, how many tickets were booked approximately, if you can share?
For this fourth quarter?
Yes.
Number of tickets you are asking?
Yeah.
Just a minute. Number of tickets. 2.6 and 4 point
No, AC is INR 2.76.
6 point-
2.646.
Non-AC. 6.88. It was total 6.88 crore. Number of tickets.
Okay. That would be roughly around INR 150 crore or odd revenues.
Yeah.
That means revenues of INR 50, 65 crores would be from the website monetization.
From the website monetization and this payment mechanism and other things, yeah.
Okay. Second question is regarding the major CapEx that you do for internet ticketing in IT.
You had guided earlier that five to six years is the period after which you consider it, and you had guided that approximate CapEx that was getting planned for FY 2021, any update on that?
This replacement of this entire ticketing system, once replaced, it works for about five to six years. We do this replacement phase-wise. 2021, we will start the replacement. Peak CapEx for this will come somewhere in 2022, 2023. We will start the replacement this year.
Okay. Based on that, if there is some major change in the software for the CapEx that we incur in FY 2023, do we plan to change our ticketing reservation charges in the coming years?
Currently, there is no such thought because when we decide the ticketing charge, we provide for this.
Okay. All right, sir. Thank you, sir.
Thank you.