Thanks, Hassan. Good evening, everyone. On the call for today's video, I welcome you all
to both the call. I would
now request, sir, to give a brief on the company's performance for the quarter and the full year.
Good afternoon, ladies and gentlemen. I mean, we had our accounts passed today by Board of Directors. And as you are all aware, last quarter the results which we have finalized today. Of course, this impact of corona was held maximum on hospitality sector and travel sector. And we our business is primarily travel oriented whether it is train booking, Air booking or catering, package drinking water.
So quarter, I mean, if I Mentioned about last quarter, quarter 4, that total revenue was INR607 crores As against 734 in quarter 4 of 2020, so there was a one Total operating revenue was 5.87 crores as against 4.98 of last year. But there was a drop in catering and it was 2.36 crores against 2.95 crores. Rail news similarly It was 51 against 43. This was primarily on account of more and commissioning of more and more plants. Fixing was INR194 crores as against INR66 crores last year, the last quarter.
It was primarily on account of imposition of So, on the call for service charge in September onwards. So, there was increase of from INR 83 crores to INR102 crores And total revenue of Estate Seats had gone down from 11 crore to 4 crore and total operating revenue was INR 5.87 crores against INR 4.98 for quarter 4. But now more important is Our total operating revenue It has gone up by almost 20% from INR1870 crores to INR2175 crores, So profit before tax has gone up to INR 745 crores from INR 4.79 and that has Gaurav, that has become 5.24 crores against 308 for Last year, which is an increase of almost 70%. Increase in turnover of 20% and PAT of 70% is Primarily on account of imposition of average charge on internet switching 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 INR12.50 per share with a face value of INR10, Out of which 100% has already been given as interim dividend.
So, 2.50% more will be given.
The first question is from the line of Ingozer from Ingozer from Ingozer Mutual Fund. Please go ahead.
Hi, sir. Good evening. Couple of questions, what would be the online ticketing booking that happened for FY 'twenty? And what
Per day, this was pre COVID period, right. And this was almost The 72% of total reserve fees of Indian Railways.
Okay, got it. I very well understand that it is not the environment to will not allow you to permit at the normal level. But 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 stopping the services to normalcy.
I mean, this is a question. It much depends on the situation and For progression or reduction of COVID and in general atmosphere of well-being in the nation where people will start again traveling? As far as teaching is concerned, perhaps it will go out because people will avoid not taking I mean, as you are seeing today, people are trying to avoid travel. Or even if somebody has to travel, Normally, they are preferring personal mode. So tourism may take maybe 6 months or a year from now to pick up.
Similarly, catering also will suffer for some time because now there is a different and So, on the call of the next question,
I welcome you all. This is the
new normal of hygiene. So, maybe there is a talk that instead of this type of fat, this This is always in doubt.
We need
to eat meal for 1 meal person can eat, but not just beyond that. Tuning ourselves to that kind of situation like currently our most of our hospitality supervisors the staff, they don't have much of work. So we, in association with ITDC and 2, 3 other professional agency, And the protection for some also, so that as and when number of trains increase and volume increases, This would be in a readiness to handle this kind of situation.
But for us to start the chain operation, it will all depend upon the government's
And Central Government will also Start the trains, increase the number of trains depending on the demand. Like currently, I think 150,000,000 of frames are running. And average occupancy is in the range of 60% to 70% roughly. So it means, I mean, it would take something.
Okay. And when it comes to cost, how are we placed? Which would be fixed cost within cooldown? And what is the variable cost?
The form of fixed cost is in form of employee cost. Because it's basically like any service sector, It's not a asset heavy organization. Right. So, basically, employee cost is more or less fixed Our employee cost for the year total is about INR20 crores And out of that roughly 20%, 25 percent 20, 25 crores, which is about 10% to 12% It is again variable. It's basically contractual employee or outsource employee, the employee that can be controlled.
And another 10% cost is within which we can control. We are trying to do something.
Got it, sir. And And we will
And obviously business wise also, It does not make any sense for any train operator to create a new Okay. And booking system, booking engine for 8, 10, 12 trains will not be viable for them. There, service is available at some nominal charges from another organization.
Right. The
next question is from the line of Manish Goswad
How much is this? This
is around 10% to 12% only. If we take over all these passenger and several more train, it will not be even 2%. But we normally we are booking only for reserve category, reserve trains. So it is about 10% to 15% only.
Okay. And another question is, during this Praveen, could you explain how does this mechanism work? And does Does anything what is the pricing for this? Just to understand, should we incur any loss loss in this market or this is
We have our software, we have our servers in place and system is already working. And manpower is also there. So, whatever booking is done, it's a revenue for us. It's not a loss loss equation for us. We are getting revenue out of it.
Out of that fixed expenditure only there is no variable expenditure linked to I mean hardly any 2%, 3%, 5%, maybe maximum 10% What is of course, steel volume is low. What we do, we have since the food is not Normal food, we have invited 2 free tenders for these trains. So we get the license fee And then 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 real leaf. That is being sold by them on which the on a margin and reverse license fee, which is decided on a transparent bidding process.
Earlier, all these Rajani, Shaka, these Hi. So margin wise, whatever is our PPC partner is
And just one final one, I said, this change which you were running, the Goa one and the one in Delhi,
Next question is from the line of Dinesh Joshi from Bank of America Merrill Lynch. Please go ahead. Hello.
Now if I understand correctly, the license will trade us money in advance. And in lockdown, obviously, his sales would be eligible. In fact, even after the operations within, the sales would be quite low in the initial few months as the
So basically, what I want
to know is that will we have to compensated the licensee in any way for this period, I mean, for advanced money which we have received or will his term be excluded? So, basically, how was the nature
of the investment in the pipeline? What we have done, Since we have collected the license fee by offering him the opportunity to sell meal in trains, Right. For the lockdown period when there were no trains, we have and We had to because licensee also has to maintain a minimum of permanent staff on role for them. What we have done, we have returned the license fee which we had collected in advance For the lockdown period, so that his liquidity is insured for payment to his staff. That is number 1.
Okay. At the moment normal services are restored, he is supposed to pay us the license fee, to return the license fee within 1 month. And if he fails within 1 month, his contract will be also be extended by the same tenure. If it does not return it, then contract will not be extended. Okay.
And now that during current period when the scale is much less, obviously, nobody will work on that licensee. So, for that period for this period when of course the entire terms and conditions of the tender and contract have changed. So, we have invited fresh bids for a limited period of 2 months, if possible by another 2 months because these are not regular trends with those numbers for which tenders were contracts were sent.
Fair enough. Fair enough. And secondly, in case of digital business, what I want to know is that, Is there any minimum capacity component that you have to pay to the railway or the holiday charges are paid on usage basis? So I mean, basically, will there be any cash
out for us to get
the time line to do some operations
to shut? That is what I want to do.
Hallead is stable for the trains which we run that is Maharaja's Express and Golden Chariot we had taken And these 2 Tejas and 1, this Mark Al Express, right? As far as I mentioned in reply to earlier question, we have there are 2 types of fixed cost. 1 is the lease charges on which railway has given the rolling stock to us. And Hollen has a fixed component and a variable component. We have requested railway ministry to waive the fixed charges as well as lease charges,
Okay, fair enough. So one last question, I think that with volumes of traffic following this lockdown, Has the deposit that we maintain with Indian Railway has also passed down? Yes, certainly. Okay. So can you please share what was affected or what was that figure as of March and what is it
Yes, pre COVID, let us not talk about much. Pre COVID, we were issuing tickets worth about 60 crores per day. Okay. Right. And this money used to come back to us in 3 plus 2 days, but we and we had to keep a margin of 1 day.
So we are Maintaining a balance of almost INR 300 crores with railways. Now this has come down to almost 13 crores, 14 crores per day. So we would be maintaining a balance of about 60 crores, 70 crores.
Will we be required to invest in the rolling stock or participation will be limited to just managing the operations, what you're doing currently?
It depends on what model we adopt. Obviously, nobody, whether we tie up with anyone, Because our expertise is in operations. Now there has to be another partner whose Expertise or who has knowledge of rolling stock and maintenance of rolling stock. In every business, some financial comes in either As CTC comes as a financier or rolling stock manufacturer comes as a financier or 3rd party comes as a financier. So, it will all depend on the structuring that we go for.
It is still not decided.
Next question is from the line of Rahul Jain from Dollar Capital. Please go ahead.
Yes. Hi, sir. So my question is for the rail nail business. So What are the dynamics now here? Because of course the volume has come off, volume would have come off significantly.
So how we are compensating the P and P partner and what are the fixed costs that we have to bear on these plans?
Speaking, if scale or picking of water from that plant is because that we give him incentive. If it is below that, there is a mechanism is already there in the contract with them, then we compensate them for the
Okay. And what would be this component on an overall basis?
I mean, it's it will depend how long this situation continues. It will depend how much less water we are able to lift from the plant.
So let's say this 170 odd crore of annual cost we have in the rail nail business, The significant part is towards that fixed the significant fees that we paid towards the procurement. So the right part reduces with the volume. As a percentage, there will be cost that we need to cover up? Is there a significant number or only
It won't be significant. So it is not significant. It's I think 10 to 12 pesos per bottle. Here we are taking to make the contracts operational And not exploitative.
Right. And so you obviously to give an idea in terms of some costs. So right now we have INR 400 crores of the cost. You said the big part of The fixed cost is the employee cost which is 200
We continue with all the employees. But yes, certainly once equation improves, we'll review it. But fixed component will be anything between 170 to 175.
Right. So right now, we have the opportunity to save maximum fee to free outflow at the overall cost basis. Is there any non employee related cost where we could deploy some cost to measure?
Yes, we as I see what we have done, we have I mean 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 question, we are not asset heavy organization. So many things are controllable and we are trying to reduce it. And Majority of our cost is directly revenue linked.
Right. And just last one bit from my side. In terms of, of course, Do we see some resumption on this or have we completely taken out all our plans for this fiscal in terms of all these trains that we luxury train that we run. Till what period we have already canceled
This luxury train starts sometimes in October. So we have not canceled it so far. But we have we will see till August And then maybe close-up to December, we will cancel month by month. We'll not cancel the entire year at one go.
The next question is
I have three questions. The first one is, trains were canceled from 15th March. But when we refund the booking, do we have to refund the ticketing Internet ticketing charges also or That is not to be refunded to the passengers?
No. Because cricketing
The government was reimbursing IR CTC to the extent of cost for this decision. Yes? If the situation extends, the cancellation of change I mean, extends beyond 12 of others, Then will the government be is there any clause that government will be reimbursing for the cost of this division? Because we are not booking any tickets right
No, I don't think it will be possible for us to ask
Sure. Sure. And so if you can just update us on still about factory, what was the revenue and the profitability run rate of
When we started this Lucknow Tejas in October, The projection was that we will breakeven in year 2.
Okay. But
this train ran till about middle of March, 15th or 16th March to be at close. Until that time, it was good to reach the breakeven.
Okay.
Right. So it ran for only 2 months. Yes, that Mumbai response was much better. And It was also nearing breakeven. Magalto ran for only 15, 20 days, but all the 3 trends combined if I mentioned, Okay.
I mean, if we spread it over the year, over 2 years, 3 years, perhaps we will cover it. Sure.
Thanks for that. And so the last question is on the privatization of the chains, which is currently under the proposal.
I mean, we can always take rolling stock on lease from some financing company, engage a company for maintenance So we said engage a company for onboard services. That is one extreme that we can do it. The other stream is that we tie up with private players either as a joint venture or a subsidiary or STV, whatever. It is still not decided. We are weighing various options.
And then we will come out with whatever is felt best.
And second last question on the switching side. In the month of January, the railway had hiked Breakfast, tea, lunch and dinner charges. But for mid of March, anyway, the trains are not operational. Is there any plan to roll back the
There's no plan to roll back the cost. In fact, rates were revised sometime in month of November. And this was implemented for all the trains which are on posted where food is bought, And ticketing is done 120 day in advance, so there was a margin of 120 days for implementing this revision. So in Rajani, it was not implemented. There is no plan of rollback.
Yes. I mean, there is a change in perception about hygiene and all this.
Thank you. The next question is from the line of Murti Chorswal from Nirmalpang Securities Private Limited. Please go ahead. The next question is from Rajeev Sivansh from Individual Investment.
Yes. So thanks for inviting me and good to hear that
our results. And I just wanted to know a couple
of things. Firstly, there is
no picture how much it will longer
First thing which you mentioned, I mean, frankly speaking, nobody, even if the best of research institutes involved are not able to Like this MIT study, which says that there will be 3 lakh cases per day in India. So one study is there and then there is another study. ICMR made one study that will peak in November. So we are just tackling the situation as it is coming. And we are trying to rationalize our operations in such a fashion that our cost minimization is done.
And whenever getting any we are going for the business. The second question about CapEx, yes, it is partially yes, some of the plans we have referred Especially relating to tourism where we had planned to play 2, 3 trains for our Because of two reasons that obviously The state financial situation will also not permit them to promote this. And secondly, tourism assets will be most effective. So we have deferred it. At the same time, some other projects like So, on the Hill of India, I welcome you all.
So, now hotel, we have just bought a land at Kewodiya where Sadhakrishna is there. Then We got approval for purchase of land for a 4 star hotel in Lucknow today only. So first things are going on, which will materialize after sometime. Hitex, which was to Result into business, in short, we have been held
Thank you. The next question is from the line of Pratik Ghedi from Emerge Capital. Please go ahead.
I was just wondering, will it be possible for you To give me a break up, this RUB 12.64 crore revenue,
There are 2 streams of revenue. One is the cost of food, so price of food rather, Net revenue is about INR 500 crores for all these prepaid trains. And secondly stream of revenue when we invite a bid for these streams, these streams are allotted to Peter who has quoted the highest concession fee for 5 years. So there is a component of annual 5 year concession fee Which is paid in 3 installments. That is another component.
So Raj from Rajdani, Shababdi's 500 crores revenue is out of sale price of food And about 75 crores for all the trains, Rajdhani, Shivadhi, Duramco is on account of concession fee that we get
that Indian railways will approach the rivalries in Southeast through private first. So is there any threat which is hanging around our catering and rail revenue, which we are getting from
There is 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 trains, which is a different story. Right now, there is no plan to hand over Then we have our plans of entering into private trains, which will give us a much higher revenue.
Your next question is from
the line of Nitin Ghosal from Invesco Mutual Fund. Please go ahead.
Hi, thanks, Sushri, your question here again. A couple of questions, most strategy specific. So online booking has
UPS is normally unreserved ticketing segment, unreserved segment which have a low ticket value. Low ticket charging service fee on low ticket value perhaps railways, Indian railways does not Consider it appropriate. Of course, and we did not agree for giving the service without any service charge. Well, we are a commercial organization.
Yes, keep it in mind, feature of technology is data
There's only 2 tickets from Mumbai to Panvel.
Yes, sir.
Anybody can travel on that.
It can be the developers. Okay.
See, currently we are meeting, I mean, if we take pre COVID period or normal period, We were meeting about 70% requirement of Indian Railways. So our primary would be first To meet the 100% requirement of Indian railway so that all these stations and trains are covered with rail needs No other water is sold on them. Once we have reached that stage, we could think of it. That's the number 1.
This press
release what you are talking is that currently all our plants are either Clothes are running at much less capacity. So this is an idea at least to meet the fixed cost if we could Retailer. And retailer generally sells the water which has the maximum margin.
Right.
Our Average costing of water is slightly higher for simple reason. 1 100% water is tax compliance. I should not be commenting here. We have to compete with lot of one off players.
Got it. I should once the train starts to normalcy, booking stop the train,
Why should they? They have given our CTC full freedom to fix the rates. So there is more rationale and logic by which they should play with it now.
Got it. Got it. Invest in fixed receipts going forward, obviously, replacing cost to certain investment which individual is including on its own like
Think of putting any or any government department cannot think of any PSE for Investing in assets of Ministry and as PSU being independent commercial organization like Sain you mentioned, Lane, we will enter as a business proposition, not as investment for Indian Railways.
You mentioned about the fixed charges, fixed lease charges that we have to pay for locomotive. So, I wanted to check how much is that fixed cost?
No, it is not fixed charge for locomotives, it's fixed charge for the Rakes, I mean the courses which we have taken for running these 3 private trains
and
this lease charge is about So 7 crores per train per year.
Per train per year. Roughly.
I mean, it could be anything between 6 to 7.
And basically, you mentioned that for all the new private things that will be operated. No, Rajnish, we have been doing so or existing things will not be privatized. It will be So locomotives or the coaches have to be bought new And they will not take it from very well.
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 disputed. But the type of rolling stock, How modern the role in the stock will be, that is defined.
Okay, okay, okay.
The next question is from the line of Rajesh Vohra from Janney Venture Advisors. Please go ahead.
But the ticket decline was around INR 50 crores. So what was how many days of business entire activity to lose in this 1st quarter?
We started feeling from January itself when travel volume was reducing. Okay. Right. And finally, the trains were canceled from I think 22nd or 23rd March. And many trains Like we canceled our pages from 17th March.
So volume was very low in the month of March, almost 50% of the regular volume. But the downward trend had started from January itself.
Okay.
Despite that you have done pretty well on the margin, you haven't let it decline significantly.
I mean largely in internet, it is basically the fixed cost of server networks and software maintenance. And Manpower, which is of certain percentage and that remains as it is.
Interestingly, the catering side, while the revenue decline was there from 2.59 to 2.46, The EBIT margin almost remained flat around 29th crore. Could you give some idea
So 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. So this rationalization of working model for this Q4? Yes. Number of tickets you are asking?
Yes.
Currently, there is no such thought because when we decide the taking charge,