Thanks, Janis. Good evening, everyone. On behalf of IDK Capital, I welcome you all to the IR CTC Q3 FY 2020 earnings call. From the presentation, we have Shri Mahindra Purnamal, our Chairman and Managing Director of IRCTC and Shri Ajay Srivastava, CFO and Group General Manager, Finance. I would like to thank the management for giving us the opportunity to host the call and also congratulate them on a very strong performance in Q3 FY 'twenty.
I will now request Denra sir to give a brief on the company's performance for the quarter. Of course, that we shall have the few additional questions. Over to you, sir.
Okay. Good evening, gentlemen and ladies. I'll repeat my CFO, Mr. Ajay, to ask you to give you the brief, then I'll be ready for your questions.
Thank you, Hirmen. Good evening, everybody. We welcome you on to the call of IRCTC Limited for the quarter 9 months on 31 December 2019. Yesterday, as you must be aware, the company has announced the unaudited financial results for the Q3 and the 9 months end of FY 2020 and the same has been disclosed on both the stock exchange also. I shall first talk about the Q3 FY 2020 results post which we can have the future answer session.
So let me first begin with the overview of the financial results. Q3 FY 2020, the revenue from operations have been to the tune of INR 716 crores, which implies a growth of 39% on a Q on Q basis and 65% on year on year basis. The service charge on the e tickets booked through IRCTC's platform, It was introduced with effect from 1st September 2019 and which has been the main driver of growth in revenue in this quarter. So EBITDA margin for the quarter has been at 37.1 percent. That in this quarter has grown up by INR 206 crores, a growth of 106% q on q and 180% year on year.
So let me now move to the business segments of the company. The first link is entering. In this segment in Q3 FY 2020, the revenue for the segment was INR259.2 crores, which implies a growth of 8.2% year on year, which is similar to that in Q2 FY 2020. The PBT margin was at 11.11% and it is the same as was that in the previous quarter. So, Grammar, it appeared that there is a year over year decline in the PBT margin, but this is primarily because prior to the listing, There were certain provisions which we made in the quarter 4 and post listing we have including these provisions in the respective quarters because of these research changes are there.
On a comparable basis, the AVIT margins are stable in year on year basis in this particular segment. This quarter, the Indian Railways has also approved the division of tariff for premium and non premium trains as well as the static units. Also there has been a change in the menu keeping in mind the customer preferences. Impact of these changes will come into effect in the coming months. While these 2 companies will increase absolute revenue and profit from the sector, the company would target to maintain the margin and enhance the quality monitoring and control to enhance the customer experience.
Now moving on to the next segment that is Internet shifting. This Q3 FY 2020 saw full quarter impact of the service charge introduction on internet taxi and which led to the revenue in this segment growing up by before coming on quarter to quarter basis. The income from service charge for Q3 FY 2020 was about INR 160 crores It's around 7.75 crore tickets being booked through IRCTC in this quarter. For the 9 months FY and FY 2020, About 23.3 crore tickets have been booked through IR CTC and the revenue from service charge has been to the tune of INR 111 crores to INR 12 crores for the period ending December 2019. There has been also a good growth in the other revenue streams, which has contributed to the tune of INR 182 crores in the 9 months as against INR 1.56 crores for the entire year in the previous fiscal.
Moving on to the 3rd segment that is tourism. In Q3 FY 2020, the revenue has been at INR151 crores, which is more than double on a Q on Q basis. Growth has been driven by both the fuel packages business as well as the state lease business which have picked up in this particular quarter. Moving on to the new trains that we have taken over, in this quarter Lucknow Delhi Tejas Stream was launched on 4th October 2019 and operated for almost the full quarter and gross revenue of around INR 15 crores. And the Mumbai Ahmedabad train has been launched in this quarter from 17th January and is doing better than our expectations.
We are also going to soon launch the Indore Varanasi Train and the commercial run of which shall begin from February 20. Now the next segment that is rail need. This particular segment in Q3 FY 2020, the Q1 growth has been to the tune of 7%. This quarter, We have also added 2 new plants at Bhopal and Jagerao and we also intend to add 2 more plants in this quarter which
will be
at Sushal and Jibbulpur. And the current capacity, the operation of these plants is around 12.3 lakh liters per day and Vishal increased to around 14.08 lakh liters per day when these other two plants also become operational by the end of FY 2020. The Board of Directors of our company have also approved interim dividend per share and this is in
line with the payout trend that
has been followed in our company in the last 3 years. We can now move on to the question
and answer session. Thank you very much. We take the first question from the line of Sanjay Rambalagar from Kepler Cheuvreux. Please go ahead.
Mainly our main revenue, which is almost 77%, 78% is from convenience fee. Of this event. And in this segment also still we are covering only 73% of total reserve tickets of Indian Railways. Still that gap of 27% is there. Of course, now it's broad based.
This is growing at a rate of about 2% to 3%. That is number 1. The addition of more and more trains by Indian Railways and these are the 2 major things. So then now we are concentrating more and more on monetization of our website. As you see around 23%, 24% income is from monetization of website, monetization of transaction charges And first miscellaneous thing, we are concentrating more on that also, advertisement on website.
And the timeline for the menu process is just to be reflected in our revenues. Do we have any timeline with respect to when we should see in the revenues for that particular
Yes, in fact, you see there are 2 types of trains. If you talk of trains, 1 is prepaid trains, which are trains like where you pay for the food along with that is Rajani, Shabdi, Duranci type of trains. And second is normal where you buy the meal. So you see our revenue will come from revision of the licensee of all these trains. And licensee, we have to do this sale analysis.
By whatever amount the sale has increased, license fee will increase accordingly, right? So this has already In effect from 19th November, now we have to do the sale assessment and that accordingly we will revise the license fee retrospectively. This will come in from 19th November. After this prepaid payment, Since money for food is taken along with fare, there is advanced reservation period of 4 months. So keeping that window, this will be effective from 28th March.
Right. Right. So 28th March, there will be revised So tariff also and in case also, licensee will be revised almost in the same fashion.
Sir, what are the plans to upgrade the countries?
Any CapEx which is earmarked for this purpose and number of countries, etcetera. This will also give us
a bump up with respect
to the sharing with we will reduce.
We will reduce. Actually, we have Put 2 consultants on the job, they have given the design, we have submitted it to railways. It is to be cleared by Research Design and Standard Organization of Railways. And they had raised 1 or 2 issues which we have clarified. So this should be cleared by them maybe within next 8 to 10 days.
Then we will introduce this design in some of the new countries. And once it is done in some production unit, we will apply this to existing pantry cars. The moment we apply, our revenue share will reduce from 40% to 15%. So this I mean really what happens whenever we set up a plant for there is a production issue and there is a logistics issue, distribution issue also. So whenever we set up a plant normally for 1st year, we operate that plant at a capacity of 50% to 60%.
In 2nd year, we increased it to around 80%. And 3rd year onwards, we take it to full capacity. So, those plants which are functioning today which are more than 2 years old are working at around 93%, 94% capacity and other plants depending on the age they are functioning.
Next question is from the line of Jaguptha from Morgan Stanley. Please go ahead.
Congratulations for a successful IPO. Just had three questions. So firstly, on the Internet switching charges, you talked about INR 1.6 crores is the convenience fee on INR 7.75 crores. That's And related to the question is that How should we think about these convenience charges going forward? How do we is there anything from the government that suggests that these will not be taken away?
And hence this is a revenue stream that will continue. So that's the first question. And the second question was how should we Think about your growth drivers going forward. So with your current segments, which segments do you believe are going to still show significant growth? And are there any new business streams that could potentially come up that could potentially get monetized and add to your revenues?
So those were my 2 questions. Thank you.
So you have missed 4 by questions with 2. Anyway, I'll answer. Now I'm really interested. See, earlier this convenience fee on internet And this was shared with Ministry of Railway fifty-fifty. When it was reintroduced in September, we were given freedom to fix it and there is no sharing with Railways.
So we put it as INR 15 and INR 30 and no sharing with railway. That is number 1. Along with this to promote all these QPI, Gheem and Rupee. Any transaction on these instruments, We will levy a charge of INR 10.20.
So second
thing you asked basically about upside of this. So I don't see in near future we will increase it because ultimately we are a government company and it's basically public service also. And in any case, we are making profits, so we should not be greedy. Increase in tariff will I don't see in near future. But increase in volume, yes, I mean it's still 27% segment of railway reserve intake on window.
With the spread of internet and more and more smartphones and all that, This is gradually increasing by about 2% to 3% per year. That is 1. And secondly, I mean, we are trying to monetize More and more our website by way of advertisement, transaction charges and Promotional VLS, promotional SMSes, that is our strategy for this segment. Got
it. Okay.
How should we think about growth drivers going forward? In your current segments, any new segments that can come through?
CTC. Currently, as you know, 4 segments, IT, I mean, Internet ticketing, I have already told you. Regarding Catherine, yes, tariff revision is one which will result in increase of revenue as well as profit. In addition to that, recently, Government of India, I mean, Indian Railways has announced that entry car will be added to more and more trains. Well, there are still lot of long distance trains which do not have country cars.
So with more and more country cars being added, that business will come to us. So that is 1. In addition to that, we are putting emphasis on e catering whereby, I mean, sitting on your berth or seat, you can order a food, So which is also increasing. And we have streamlined the system of train side vending. This is a service where There are no country cars in the train.
Somebody comes and takes the order and supplies the meal at taxi station. So we are working on all these segments, All these switches, I'm hopeful that this will grow. Now coming to I mean recently, early elections were held and manifesto of Aap party which I had a company majority in their manifesto. They had mentioned that they will carry 10 lakh pilgrims, senior citizen or only to various pilgrims sites. We are the only agency for them who rather we are the only agency we carry in.
Last year we did business worth about 70, 80 So with this kind of allotment, this segment is likely to get a major boost. Coming to new segments, yes, as CFO mentioned, we have entered into operation of trains, This is anything we expected with one train and we are hoping that this will take even in the end of year 2. That was a slow Delhi Tejas train. But performance is better than what we expected. Kitchen train which we introduced between Ahmedabad and Mumbai.
Fuel occupancy and response is much better than what we expected. So now we are trying with 3rd train, which will be a And there is a huge demand of pilgrims in this catchment area of Eastern UP and Bihar who are likely to take this train. So we will work on these three trains, consolidate for about 2, 3 months. And then We will take forward with more and more trains and the new opportunity which railway is coming 150 trains with new kind of rolling stock in different sectors. So we will participate in that also.
We take the next question from the line of Rajeev Bhatia from JMP Financial. Please go ahead.
Yes. Hello. Good evening, sir. And now the third one, you're looking to Balsamiyan Indore. Going ahead, how many more phases, trains are in
the container planned?
And how could we function what type of Row 3 could be subject
to this segment area? Initially, We were offered to run 2 trains and we selected the roads. And as I told you, we are expecting them to breakeven by end of year 2. But you will be happy to know that, I mean, the earlier trend is the Lucknow, Lucknow Delhi Tejas is So nearing take even in Q1 itself. So we are highly encouraged with this.
And Baba, Mumbai is performing even better. You can see why is it is much ahead of Lucknow pages. So you can expect it to breakeven in the Q1. I mean, certainly, this is breakeven in Q1. Okay.
We are a small organization of about 300, 400 executives. Now to run more and more trains, we need our own staff. So we have to offer a to drive also. We will consolidate on this. We will learn from the mistakes whatever have happened.
Assimilate the success of these trends and then we will go and operate more and more. Okay. So that there is no short term measure. Right. So sir, if
you could just tell me certain cost dynamics. Suppose if you have to run a train from a route, what kind of hosting is really needed and what kind of
Our trains, we are the operation of trains is managed by railways. Private driver, guard and all that and station is staff, signaling staff, track maintenance is done by railways. For that, we pay Indian railways of holllet charges, there's a fixed formula as per which we pay them the holllet charges. Okay. Great.
And for other services on board, which is catering, security, housekeeping, selling off ticket, Ticket checking, all this is on PPP mode. We engage one agency which does this, but yes, for every train we need about 1026 of our own staff to for supervision. The moment we value this, It will be uncontrollable.
Right, sir.
Yes.
Thank you, sir.
Thank you.
Thank you. Next question is from the line of Sujeet Jain from BSE Investments. Please go ahead.
Sir, congratulations on a good set of numbers.
Thank you.
So you said 2% to 3% growth in We own tickets that Indian always sell and there is number of tickets.
There is 2% to 3% growth in passenger segment. That is number 1, right. And then second is Passengers migrating from withdraw booking to internet booking, another 2% to 3%. Correct. These new trains, like 3 trains we are managing, that is a straightaway addition and now railway is opening sector for 150 more trains.
So obviously, any party which takes 1 sector for 10, 12 frames, they'll not set up their own website.
So this 2% to 3% growth will go higher? Yes. In your estimate, what that number will go up to? It's
difficult to say because messenger movement dynamics is currently growth is only 2% to 3%, earlier
So it goes to be 7% to 8%.
So depending on the situation of economy movement also increases. I'm being conservative when I say 2% to 3% in passenger growth and 2% to 3% in migration from window to web. And
the 4.5 costs, 1.60 costs from convenience fees, remaining 65 costs
It's from advertisement on website. And you see on our website, there's a total Transaction of almost INR 35,000 crores in a year, right. So now we are Switching into that also a share of that. Then advertisement on website, then we are using our database for sending promotional mailers, promotional SMSs, targeted marketing. And then, we have a network of agents.
The charge name annual precedence fee, all this is on that account.
At what rate does Eastman grow? What rate it has grown for 9 months?
9 months it has grown up by about 12% to 13%. And it will grow as more and more people are being targeted marketing is one area where We are growing at about 12% to 13%. Last year, our total revenue from test was 1.46 crores, 1.45 crores roughly. You see this year within 9 months we have pledged 1.77. Of course, there is a lot of uncertainty because we are doing some of tailored projects.
So we exactly don't know what will succeed. But so far we have succeeded in growth which is appreciable.
Okay. And in catering, like you mentioned, actually it kicks in 40 chains, if it trains almost at the end of the year, that is for March. 20th March, yes. And what do you say off the shelf, it kicks in immediately, right? Yes.
So for the As a whole, IRCTC as a whole. If you are getting INR 100 rupees completing both license and direct deals, Because of the increase that you have in tariffs, on a blended basis, what that number will go
The idea is we have to do a scale assessment of all the trains, and then we have to work out the percentage. And then we have to correlate it with the price increase which has taken place.
No, but you already have the number of price increase that is happening in the menu, right?
The number of price increase is there. But sales volume whether it has gone up or gone down, still we have to assess. Because in Rajani Chhatabdi, pre paid trains which I mentioned, now we have railways have given the option of opting out also. So passenger has the option of not taking meals and purchasing only travel parts. So all that assessment we have to do, we should be doing it by Q.
Just last one question related to business. How much of the funding revenue for 9 months Is the excess and how much is license and concession fee? And when you charge concession fee to the customers handling the processing, What percentage of his revenue you typically charge at IRCTC level as a whole?
Let me see. Our turnover of that is Real potential in Rajani, Shabanti, Duronto is for 9 months, it is about INR 430 crores, Right. Okay. And this license and concession fee which we take, that is about INR 2.40 crores for 1st 10 months. This will certainly go up, but by what extent we'll be able to tell only when we are able to do the sale assessment?
It adds to only INR 6.70 crores, you've done a turnover of INR 308 crores 9 months. You said INR430 crores, e
book. In this, I told you about the Mumbai portion only. Then we have static units like food plaza, fast food units, refreshment room, Janahaar, cell kitchen, Bliss Kitchen, e catering and all that is another INR 110 crores.
Okay. And one last question was that of the monetization on your website, which you just called out in terms of marketing, etcetera. The margins remain in line, which is about 80% overall. Would you remain in line with what you
No, it depends. I mean, it's difficult to Charge margin of 80% from your marketing activity and all, but it changes from product to product.
What Like I
see advertisement on website, it has no cost. Exactly, yes. So, their entire thing is margin. But when we go for sending promotional SMSs, then margin is much less. Same happens in case of payment gateway and financial transaction charges which we recover from the instruments.
There is no process such. So will we get margin only? Yes, yes.
Understood. Thanks.
Next question is from the line of Janesh Gandhi from Sudhakar. Please go ahead.
Thanks for the opportunity. Thank you. Sir, I just want to know that on a sustainable basis, what So I want to know whether this is sustainable or not?
This is sustainable. This Internet 15 has a peculiar feature that every 5 to 6 years you have to go for a major CapEx Which is almost INR 250 to INR 300 crores when you change over the entire system. After that, it is only annual maintenance contracts and annual support, Internet leasing charges, the cost, what is there? So, I mean, margin of 85% what you are mentioning, yes, it will remain more or less same Because the depreciation and all that is already voided in this. This is we did not see any
major change also. Okay. And then where are we in terms of timeline? You mentioned that after 5 to 6 years, we'll have to go major CapEx. So is it nearby or we think Suvir still far away in the cycle?
No, it's nearby.
Okay. FY
'twenty one, 'twenty two we'll do it.
Okay. In
any case, this changeover is not that overnight you buy a new server and port. This changeover itself is a 2 to 3 years exercise. So we keep on doing something. I mean, next year we will start doing something. We will do about 20%, 30% of the work in 2021.
Major work will be in 2021, 2022.
And secondly, adjusted service charge or revenue have any significant component from
and to the ticket to railways. I mean, basically, how does this transaction function? Actually, we pay to railways in advance because railway earning Is a central government earning, and any central government earning has to go to consolidated fund of India first, And only any party can have charge on it. So we maintain an advance with railway in a rolling deposit. Against that rolling deposit, we purchased Sikind on behalf of all the passengers who book it and Add on our service charge convenience fee on that and then and replenish the rolling deposit with railways.
So you see in 2 sales our business cycle in internet fixing is 48 hours. I'm sure there is no other business No other product which has a business cycle of 48 hours, maximum 72. I mean we Give me ticket and get back the money along with profit within 72 hours is outer limit. Only we ticket within 48 hours. America construction company or any other company where it may be 48 months.
Okay. One last question. Post this certificate, if I can mobile and certificate, I understand that the license fee income will rise. But does this income have any kind of cost attached to it apart from the railway share which we have to pay?
No, there's a on the license fee, there are 2 major expenditures. 1 is railway share that we pay and second is our administrative cost. Realvest share will obviously increase because it is a percentage function of the revenue. Our administrative cost will remain the same or maybe increase at the same pace
It's virtually a proxy for your EBIT, right? It will directly move down to your EBIT?
Yes, Amaj? Largely.
Largely.
Can you just excuse me for one participant, Ajay, I mean CFO will reply. I've got sore throat despite that I'm shouting. So just give me some relief. Next participant, our CFO will address, then I'll come back.
Sure. Nikkon and Japri Voda from Nikkon and Japri Voda from Nikkon and Japri.
Hi, Puneet from on a couple of numbers. Just to understand, let's say, the peers which we've been running this trade, So what sort of revenue would you have clocked? And what sort of EBITDA would you have compliance for a smaller period?
This Tejas train?
There are 2 trains, whichever.
No, actually in the similar quarter, we have operated only one train that is Lucknow and Delhi Tejas. And in which we have And almost achieved breakeven. And so far as the other train is concerned, it has been in operation only with effect from 17th January. It is so far as the figures and the indications are the occupancy level is it is quite a challenging sign. And We hope that it will be as we also be achieving a particular in this quarter.
And any update on the airline testing? How is that progressing? What is the road map, sir?
Airline ticketing has also picked up. And Yes. It has on an average, if we see for the 9 month period, it has been to the tune of 4,700 and So which initially prior to this fiscal, it was around RMB 4,700. So it has picked up significantly.
Our receivables are largely from railways. I mean, it's more than 60% Receivables from railways in the sense that for all these prepaid trains, this Rajani Shatabdi Durantho, We get to the licensee and we get back from railways. Now To overcome and it used to take about 2 to 3 months. To overcome this, we have worked out a MOU with railway, whereby 80% of this payment will be made to us on the day of journey. This will start from next financial year.
So at least INR 700 crores of services which we offer, 80% we will get on the day of service. And then for balance we will raise the bill and existing system will follow. It will come down. Now coming to this year's outstanding, there are there were some budgetary issues with railway ministry and home ministry. So, I mean, it will be cleared in the month of April.
So, for the Home Ministry, we carry all these parliamentary staff to for elections and all that. There our receivable is about INR 100 crores. So with I mean with the April coming of April, we should get
Your next question is from the line of Adi Shodhpur from Telkabang. Please go ahead.
My question on the revenue per revenue per ticket in the 9 months, it was of 9.0 6% this quarter is at 21 rupees. So
and almost 35% of the tickets are in AC category. Okay. This 2021 is the average yield for this. I don't know where from you got this figure of INR9. It is perhaps on account of the fact that in that quarter, the service charge we had levied only for 1 month, that is September.
And the second question on the occupancy level of the first two, What is the occupancy level in terms of percentage, sir?
So, this Lucknow Tejas, it is around 65%. Okay. And Ahmedabad is about 80% to 85%.
80% to 85%.
See these trains we have taken from railways on payments of lease charges.
So that
is one outgo. Right. And second is, we pay to railways, Public charges payment to railways on account of operation of the train, the engine of the train, driver of the train, guard of the train, Entire track, signaling, station, fuel, everything is given by railway. So for that, we pay them a holiday charges. These are the 2 major outgo and then some expenditure on account of staff which we engage, that is a minuscule portion of overall expenditure.
Regarding revenue, we have full freedom of fixing the fare in these trains, unlike railway where it is administered price and Only that much can be taken. So we have introduced a concept of dynamic pricing just like airlines. And we get money from there and money comes directly to us. So that is the model. Yes,
sir. So my first question is for the tourism business. We saw a jump of
Tejas is one of the region which has contributed. The second biggest reason is our luxury team that we run with Rajas. It's run only largely in winter. So it generally starts in last week of September and operates till end of March. This is number 2.
Thirdly, you see there is a curtain in India that almost all there is a massive tourist movement in 3rd quarter. Nomaret tour packages and all that which we sell is accounted for in 3rd quarter. And lastly, we got an order of 72 from Delhi Government for carrying of pilgrims to sorry, that is state tier segment. There also you'll see a growth. There we took most of these passengers in 3rd quarter.
Okay. And from in pages business, I think you said on the major interview the revenue was in crore for the quarter. So why we say this is breakeven? I thought based on the base fare computation,
The CapEx spend fund must be much lower than this number.
Are you aware about the costings?
I think what we said during the IPO had 70% utilization on baseband basis is what we
Yes, 17% was conservative, around 65%, 66% is the figure which we have outraned. We have done some cost reengineering and we are reaching at about 60 high, 60% occupancy for like 2 pages. That is what I'm saying. I mean, still I stick to that 70% with minor costing reengineering, we have reached a figure of 66% which we are
achieving. Okay. And One question on the catering business. Last year Q4, you saw a good jump in catering revenue around 18%. Is there any seasonality in Q4 in this business that we can expect this year also?
See, last year Q4, I mean we were not listed company till last year. We were making all the provisions in the last quarter. And this year we are making provisions quarter to quarter. There you must be seeing a drop in our Margin in Q3 vis a vis last year vis a vis last quarter. What?
It will stabilize by end of
by end of by end of by end of by end of by end of
by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of by end of last quarter and annual accounts.
Your next question is from the line of Harishya from Vijay Dinesh. Please go ahead.
Thank you for holding the opportunity. Just wanted to get a sense, so in your real year plans as you're expanding, what would be the approximate CapEx will be required for that.
See, one real deal plant, what we what is our model that we buy the land from state government or any state agency. And then On a transparent bidding process, we select one experienced party in pitcher drinking water manufacturing and distribution. And then depending on the capacity of the plant, we make an assessment that what is the likely CapEx in that for setting up the plant. So we in the document itself we mentioned that this much money will be paid to you which is being paid based on the progress of work. So on average, Our real near plant needs about an acre of land and we buy it since we buy it from government or government agency, it's generally INR 2 crores to INR 3 crores maximum.
And average plant of about 6,000 cartons per day, sourced about 10 to 12 gross of CapEx, out of which 80% we give and 20%
As you know upfront or is it generally over cleared of the construction of the plant?
Over the construction of plant, construction link and machinery supply link. Like out of 12 crores, there is construction worth about 3 crores And rest is machinery. So based on the supply of machinery, installation of machinery, commissioning of machinery and progress of civil construction work. I mean it's defined in the interim document.
Okay. Thanks. That's helpful. Secondly, I think earlier in the call, you had mentioned that so you've tried the convenience fee from customers for the Internet
It is like on our normal charges are INR15 for sleeper class and INR30 for AC classes. For UPI, premium and rupee, instead of 15, we charge 10 and instead of 30 for AC class, we charge 20. Less than normal.
Thank you. The next question is from the line of
So my first question is government is credit to privatize 150 change. And in that, I would completely like to say
that Adani also shown interest in
this offer. So how much things
we are expecting and what's the alignment that those
streams. Anything you want to add in?
They have just come out with RFP and We are also waiting for that. We have engaged consultants for entering into this segment and what should be the exactly model, whether we should This business basically has 2 components. 1 is Investor or rolling stock provider, second is operator. As on date in India, there is no other operator other than IRCTC, Right. So we have to tie up with some manufacturer of rolling stock or some investor who can organize rolling stock for us.
Obviously, he will also come then and he is putting major investments. So what structure will be more suitable for JV, SPVs, all that we are studying and you'll certainly participate in that.
Okay. And my
You see, Lucknow, if you take example, Lucknow, we had got a land for about INR8 crores is the cost of land and we are constructing the shell only, right. And furnishing and interior pay money is being spent by PPP Partners. So, he is our partner for 25 years within which he will pay, number 1, This opportunity cost of money which we sell at no hotel we have put in a cost of INR20 crores for construction of Shell which we'll pay. And cost of land is about INR8 crores. So for this INR28 crores, he will give us a fixed return of 10% which we have worked out that in the case he has to pay.
And once he starts operation, he will share his revenue with us. It's a safe model instead of keeping money in the bank. We are creating an asset which is generating Money more than banks as well as asset has been created. Same model we will follow for
Next question is from the line of
You see, as I mentioned, we have to maintain advance with railways. That is the perhaps only working capital required. On an average, we issue tickets worth about INR 70 crores per day, Average Antalyk, normally we get our money back into the bank in 48 or outer limit is 72 hours. So we have to maintain a balance of about 2.10 crores, which is normal. Now then we also study what is the peak time for booking because there are days when especially festive days and holidays and all that, When we booked tickets, it was almost INR 200 crores per day.
So that means 3 in advance and accordingly pull in more money in the rolling deposit. And depending on the holidays, I mean, in any financial year, there are 4 or 5 occasions when banks are closed for 3, 4 days. Saturday, Sunday, I'll be seated or followed by holidays. So then we have to meet the Krishna provision.
So basically, sir, the year
end number will only be about
INR 200 crores because that's a March end number and there
is no Depending. Like, I mean, for that, Like last year what happened, 31st March was Sunday, there were 3 holidays. Hello, 5 lakhs, testing automatically stops and we cannot report that situation.
My second question is on the non ticketing business on total. All your verticals put together based on your business plan that you have, what should be projected Growth that we can see in some couple of these businesses, what will be your capital commitment there? And what is the ROC that you seek on the capital commitment? I'm okay if you give some total of non ticketing, I don't want it individually.
You see, being in hospitality, our CapEx requirement is not much except for this internet section which is spread over, right. Coming to it, All other CapEx which we've highlighted, our business cycle is very short. Normally, JFET is here incurring something. When we start getting result out of it that within a year or 2, really we make investment about About 14 crores, it takes about 9 to 10 months for setting up our plant and we start getting our return within I mean immediately after 1 year. Chantrikar upgradation which he mentioned, I mean it will take about 45 days for upgradation And the day we upgrade our revenue share to railways will go down.
So that is the situation.
Next question is from the line of Sushar Voda from M. K. Ventures. Please go ahead.
Thank you so much for the opportunity and congratulations sir on an excellent set of numbers.
So just a few points. First,
If you could just explain what would be IRCTC's role and say proposed investment in this? And why are we looking at such a large number as trend.
There was a talk, but it's not relevant and No.
Okay. We aren't doing anything of this, And along the lines of the budget hotels, hotels in Lucknow and a couple of other places, We are also making these pods. I believe we started 1 already in Bombay.
We have started with 1, yes. It's basically pods are We don't invest in that. What if you have traveled in railways, there is a concept of retiring rooms and stations which are project accommodation and discussions. So
This is
primarily on CTC model we give, we get it from railways and put it on to a partner who upgrades the retiring room, This has a minimum committed license fee and then he operates and manages it. So we would not
be investing again on these. It would just be of your revenue share? Yes, yes. Alright. So just how much would we be getting from leg rooms, etcetera, right now and keep This number is in 3 years as
we took it now.
This I mean, our scheme is a comparatively much smaller business recurring room license fee which we get is about 3 to 4 rooms only. But yes, this has resulted in a much improved service with passengers. If you see some of our recurring rules there as good as you can compare it to a 3SR hotel. That very nominal price in stations like Yatra, Jammu, then Madurai and erode all that now, Gorakhpur. It's more of a passenger amenity.
Understood, sir. Sir, second, very quickly, the newer initiatives that we had highlighted in the
Payment gateway, we have already started. We have done a pilot project with 1 firm. And normally we enter into this kind of agreement for 1 year then go for open bidding process. You see our revenue from IK, which is our payment gateway.
CTC. 17
crores. 17 crores. 17 crores. So, I mean, we have Succeeded in this filer. In the previous year, it was 2.56.
This year, 1st 9 months, we have made about 18 crores.
Thank you. Next question is from the line of the Agoda from Safaya. Please go ahead.
Yes. Hi, Rudolf. Thank you very much for the opportunity. So my first question revolves around your revenue. Now This
is the quarter where we
have seen a full impact of basically higher revenue in terms of your entire service charges So with this base as a INR 7.15 crores
odd on a
quarterly number, so what sort of growth from this base is what we can envisage going forward.
If you could, I have already replied this Because there is a growth in passenger currently because of recession, this growth is about 2% to 3% only, but generally used to be 5% to 6% in railway passenger segment, the growth was there. And then still 27%, 28% of reserve segment is unmet. There's a segment on web is unmet. People are still buying ticket from window. Yes.
Gradually, they are migrating to this and that growth is also on about 2% to 3%. In addition of new trains, Announcement of more and more private trains, these are basically the growth drivers.
No, sir, sir, I heard that basically my question
As I replied in the previous question, this payment gateway, So the thing which we have been experimenting for last 2 years, when total revenue on payment gateway last year was 2.5 crores, This year in 1st 10 months only, we have done about INR 16 crores. So now we have launched our This payment gateway, then we have launched our own card also, Chai Mudra. So there we are likely to get Transaction charges also. So we are experimenting and lots of pilots are in pipeline. CTC.
This I am mentioning is some of the successful pilots. There are few where we have not been successful, but We have not invested anything. It's private part 2 comes and inverts and take the risk.
Okay, Fair enough. Understood. And so my second question revolves around your margin. So can you comment on sustainability of the difference
between EBITDA margin that
you and any scope for improvement over and above that because of your tariff provision in catheter catering business?
In texting? Overall? Overall, I mean, yes, next 1 to 2 years, I don't see any problem because all the if you stick capturing, then revision of license We are getting more and more plants commissioned and the plant which we commissioned last year will run at 60% this year. And then this is Ketan and this new trends which we are doing,
Hello, Nana.
Yes, thank you.
So, what is the scope of the improvement on this 37% we are kind of currently reporting?
Scope is unlimited and we are making our best efforts. Thank you. Tozongamak, I think CFO will get.
I thank all the participants. And if there are any queries at any point still left,