INDIAN RAILWAY CATERING AND TOURISM CORPORATION LTD- IRCTC -CORPORATE PRESENTATION-NOV,27,2020

 

IRCRC

INDIAN RAILWAY CATERING AND TOURISM CORPORATION LTD. IRCTC 

(A Govt. of India Enterprise-Mini Ratna)

CORPORATE PRESENTATION

NOV,27,2020

Section 1:Brief Overview of IRCTC

CORPORATE PRESENTATION 

 87.4% stake by Government of India and under Ministry of Railways

 Mini –ratna (Category-I Public Sector Enterprise) by the Government of India, on May 1, 2008.

 only entity authorized by Indian Railways to provide online railway tickets, catering services to railways and packaged drinking water at railway stations and trains in India.

FY20 Revenue: INR 24bn

FY20 EBIT: INR 8bn

FY20 PAT: INR 5bn

INTERNET TICKETING :

SHARE OF REVENUE :FY 20       : 27%

SHARE OF EBIT FY 20  :            :71%

Business description       :

 Offers ticket booking services through website and mobile application

 Over 301mn tickets booked through IRCTC’s platform in FY20

 Offers value added services like e-wallet and loyalty scheme through a co-branded credit card

CATERING :

SHARE OF REVENUE : 46%

SHARE OF EBIT : 17%

BUSINESS DESCRIPTION :

Mobile catering services on-board 417 trains through pantry or base kitchens

Static catering services at Jan Ahars, cell kitchens, food courts and refreshment rooms at railway stations

 E-catering services allowing passengers to order food from partner restaurants and food outlets

PACKAGED DRINKING WATER

SHARE OF REVENUE : 10%

SHARE OF EBIT :         8%

BUSINESS DESCRIPTION :

14 operational plants across India with capacity of 1.4mn bottles per day

Operates 1,926 water vending machines at 685 stations

Produced 275mn bottles in FY20

TRAVEL & TOURISM

SHARE OF REVENUE : 17%

SHARE OF EBIT           :     3%

BUSINESS DESCRIPTION :

Offers domestic and international tour packages, hotel bookings, car rentals, air ticketing, educational tours, charter train packages and cruise packages

Operates special tourist trains like , Buddhist Circuit, Bharat Darshan and theme based tourist trains

Operates Luxury trains like Maharaja Express and Golden Chariot

 

Key milestones in IRCTC’s journey so far:

2019 :

Listing of IRCTC shares.

Railneer was awarded with Asia’s most trusted brand award 2019

Conferred India e-Retail Awards 2019 in Leisure and Travel e-Retailer of the Year

.Awarded for best content in a e-commerce app in ICL-2019

Conferred with International Business Leadership Award2019 by IBC Info Media Pvt. Ltd.2019

2017 :

Ranked in Fortune India Next 500 list of Indian companies.-2017

2016 :

Awarded the national award for e-governance 2015-16, Gold for New Next Generation e-Ticketing System in the category of “Innovative Useof ICT by Central Government PSUs” by Government of India

Received India Power Brand 2016 award in the category of “Most Recognizable Brand of Indian Origin” within its industry segment

Awarded “One of the giants of tomorrow-Fortune India The Next 500” by Fortune India

2015

Awarded the Most Innovative e –Retailer of the year award by Star Retailer Awards

Awarded the Most Popular Award by Website of the Year India at the Website of the Year India, 2015 in the ‘Leisure & Travel’ category

IRCTC connect mobile app awarded Mobillion award under the category “Best Use of Mobile App2015"

2014

Awarded the most popular web site award by web site of the year India in leisure and Travel category

2008:

Conferred “Mini-Ratna Status” for Category –I Public Sector Enterprise

IRCTC’s tourism portal was awarded the National Tourism Award2008

2014:

Awarded the most popular website award by Website of the Year India in leisure and travel category

2002 :

Commenced internet ticketing services

 

Section 2: Key Investment Highlights:

IRCTC is the only entity authorized by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India

·        Operates one of the most transacted website www.irctc.co.in in the Asia-Pacific region

·        Responsible for providing catering service across the railway network

·        Only authorized entity to provide packaged drinking water at railway stations and trains in India

·        One-stop solution for travel and tourism services

·        Robust financials demonstrating strong growth and profitability

·        Experienced leadership with deep domain knowledge

IRCTC is one of the most transacted websites in Asia Pacific with a transaction volume of over 25mn per month and 5.5mn logins per day

More than 0.8mn tickets are booked per day on www.irctc.co.in and “Rail Connect” in FY20

Dominant market share of c.73% in reserved Rail tickets

IRCTC is charging very nominal convenience fee of Rs.15 for Non AC and Rs.30 for AC Tickets

IRCTC is expected to benefit from shift to online booking given the current COVID-19 pandemic

 

Responsible for providing catering service across the railway network

E-catering to fuel growth in the coming years:

STATIC CATERING : Catering services offered at railway establishments located at railway stations across the country: Jan Ahars, Cell Kitchens, etc.

MOBILE CATERING : Catering services provided aboard a train, through a pantry car attached to the train or base kitchens located at major locations

E-CATERING : 1. 690 vendors are providing e-catering service across 358 stations

2. Key brands providing meals include Domino’s, Subway, Haldiram’s, Faaos

 

Only entity authorized by Indian Railways to provide packaged drinking water at railway stations and trains in India :

Consistent increase in number of bottles produced each years

275 MN BOTTLES IN FY 20

Manufacturing presence across India with robust pipeline of upcoming plants

 

One-stop solution for travel and tourism services :

IRCTC has a wide array of offerings making it a one stop solution for all travel services and tourism products:

Domestic Tour packages :

Holiday packages

Packages with charter train / coaches

Customized tours, LTC tours

Air packages

Educational tours

Inbound tourist targeted tours

Maharajas' Express,

Buddhist Special,

Golden Chariot

MASS TOURISM :

Bharat Darshan

State Specials

Election Specials

Ramayana Yatra

Unity Express

Samantha Express

Ram Sethu Express

OUTBOUND TOUR PACKAGES AND AIR TICKETING :

International Holiday Packages

Air ticketing

Corporate travel

OTHERS

Event management

Charter trains / coaches

Air charter business

Hill and Heritage charters

Saloon tours / charters

Online reservation of accommodation

Glass top coaches

Cruise packages

Revenue from Maharaja’s Express Trains has continued to increase but in the FY20 the revenue from Special trains has reduced as compared to FY19

Robust financials demonstrating strong growth and healthy return ratios :

Diversified revenue streams with Internet Ticketing and Catering key growth drivers (Revenue –INRmn) : CAGR 23.2% FROM FY 18 TO FY 20

Change in business mix has resulted in improvement in profitability (Segment wise EBIT margin)

High profitability and debt-free operations driving healthy return ratios

Healthy dividend and payout ratio 40.5% :39.7%:37.8%

Return on Net worth :23.2%;28.8%;39.8% (FY 18,FY19,FY20)

 

Experienced leadership team with deep domain knowledge

Mahendra Pratap Mall, Chairman and Managing Director

Chairman and Managing Director since Sep’17; Previously served as Director –Finance and Group General Manager -Finance

Officer of Indian Railway Accounts Service and has over 30 years of experience in with Indian Railways and Ministry of Urban Development

Awarded “Most Influential CFOs of India” by Chartered Institute of Management Accounts in Jul-15

Ajit Kumar, Chief Financial Officer and Director –Finance

With the company since May-20; was previously working as Financial Adviser and Chief Accounting Officer at Indian Railway Organization for Alternative Fuels

Officer of Indian Railway Accounts Service and has vast experience in different organizations of Railways and outside bodies

Strong legal background –instrumental in documentation of tenders and contracts

Rajni Hasija, Director -Catering Services, Tourism & Marketing

Director -Tourism & Marketing since May-18, and also holds additional charge of Director -Catering Services since Jul-19

Officer of the Indian Railway Traffic Service and had over 29 years of experience with Indian Railways in various capacities

Holds Bachelor’s and Master’s degree in Science, Bachelor’s degree in Law and Master’s degree in Philosophy; Has also completed Executive post graduate diploma in management from Delhi School of Professional Studies and Research.

 

Section 4:Recent Developments and Strategy Going Forward:

covid19 Update :

COVID –19 Update

Internet Ticketing

Travel sector experienced massive disruption due to the outbreak of Covid-19. H1FY21 segmental revenue declined by 53% YoY

Indian Railways has gradually opened up train services since June and currently 465 trains are operational

update :

Partial running of trains from June onwards has improved volume of e-tickets to ~4.50lakh  average tickets/day

Long term, we believe the pandemic could accelerate e-ticketing penetration

Catering and Hospitality:

Impact in FY20 has been minimal however, H1FY21 segmental revenue declined by 80% YoY

Static catering in railway platforms are operational on a takeaway basis

UPDATE :

Long term we believe, consumers will continue to demand hygienic food options which bodes well for IRCTC

 

Packaged Drinking Water

During lockdown Rail Neer had idle capacity. H1FY21 segmental revenue declined by 89% YoY

In Q1FY21, production could not take place during 45 days in all 14 plants. Plants are expected  to run  with reduced capacity on account of lesser number of trains.

UPDATE :

Out of 14 operational Railneer plants, 13 plants restarted production with reduced capacity on account of lesser number of trains.

IRCTC is contemplating alternate strategies to increase the sales off-take

Travel and Tourism

This will be the most affected sub-segment of IRCTC as the discretionary travel has been most disrupted

Air ticketing segment is gradually opening up since May with reduced occupancy on operational flights

UPDATE :

We have sought for waiver of lease expenses on rolling stock IRCTC sold 0.47mair tickets (segment) since the restrictions on air travel has been eased (Apr-20 to 16-Nov-2020)

POTENTIAL GROWTH DRIVERS :

Catering and HospitalityPackaged Drinking WaterTravel and Tourism

CATERING & HOSPITALITY:

Increasing demand for hygienic eating options for train passengers coupled with affordable and hygienic catering options offered by IRCTC with high degree of transparency

Increased realization per meal served post the rate hike in November 2019

Continuing momentum in E-catering services which has grown at 70% CAGR over the last three years to reach 21,571 orders per day in FY20

PACKAGED DRINKING WATER:

Rail Neer is an extremely affordable bottled water brand served to train passengers while ensuring highest quality of cleanliness and purity

Post commencement of capacity enhancement exercise currently being undertaken, IRCTC can increase its share from ~45% to potentially reach 80%

Surplus production if available can be used to serve customers outside the railway network

TRAVEL AMD TOURISM:

IRCTC can successfully leverage the trust reposed by our customer base and well established network to effectively tap the huge tourism opportunity within and outside India

Continue to drive growth in the air ticketing segment which grew 20% yoy in FY20 to reach 5,688 tickets per day Private Trains

PRIVATE TRAINS :

Leverage lucrative private train operations allowed by Ministry of Railways to offer end to end travel services at market determined pricing models

IRCTC is the only private train operator with experience of operating 3 trains operated in a asset light lease based model IRCTCalready has experience of running 2 Tejas trains (New Delhi-Lucknow, Mumbai-Ahmedabad and 01 KashiMahakal Express (Varanasi to Ujjan)

Internet Ticketing

 E-booking penetration is ~73% of the total reserved train ticketing in FY20 and this is projected to reach 81-83% by FY 24 due to factors such as increasing internet penetration, convenience, low cost of data & smartphones, etc

Reserved tickets forms ~17% of all passengers travelled and only 2% of passengers travel through higher class coaches. Improvement in per capita income of our travelers will lead up-scaling resulting in better growth & realizations

QUARTERLY RESULTS :

IRCTC - Indian Railway Catering & Tourism Corp (in Rs. Cr.)	Sep '20	Jun '20	Mar '20	Dec '19	Sep '19	YOY	QOQ
Net Sales/Income from operations	88.56	131.33	586.89	715.98	513.37	-82.75	-32.57
Consumption of Raw Materials	2.82	8.06	23.27	30.17	26.78	-89.47	-65.01
Purchase of Traded Goods	0.24	0.14	2.51	7.18	9.42	-97.45	71.43
Increase/Decrease in Stocks	1.58	0.46	-0.61	-1.14	-0.14	-1228.57	243.48
Employees Cost	6.79	49.59	68.5	60.71	59.28	-88.55	-86.31
depreciat	8.94	9	10.39	12.27	8.79	1.71	-0.67
Other Expenses	82.7	116.94	291.33	353.39	275.6	-69.99	-29.28
P/L Before Other Inc. , Int., Excpt. Items & Tax	-14.52	-52.86	191.5	253.41	133.65	-110.86	-72.53
Other Income	20.17	25.14	19.94	19	21.77	-7.35	-19.77
P/L Before Int., Excpt. Items & Tax	5.65	-27.71	211.44	272.41	155.41	-96.36	-120.39
Interest	1.33	1.68	2.87	1.99	1.21	9.92	-20.83
P/L Before Exceptional Items & Tax	4.31	-29.39	208.57	270.42	154.21	-97.21	-114.66
Exceptional Items	42.37	0.01	0.41	--	--		423600
P/L Before Tax	46.68	-29.38	208.98	270.42	154.21	-69.73	-258.88
Tax	14.05	-4.78	58.37	64.62	54.38	-74.16	-393.93
Net Profit/(Loss) For the Period	32.63	-24.6	150.61	205.8	99.82	-67.31	-232.64
Equity Share Capital	160	160	160	160	160	0	0
Basic EPS	2.04	-1.54	9.41	12.86	6.24	-67.31	-232.47

 

PE    192.77    -255.357        41.79      30.58      63.02

VOLUME  1,04,32,630                       

52 Wk L/H      774.85    1995                    

HISTORICAL PRICES                             

1 YR BEFORE  875.6                         

3M Bef    1360                          

1M Bef    1292                          

1 w bef   1351.1                        

now        1570.6   

Share Holding Pattern in (%)
Standalone	Jun-20	Mar-20	Dec-19	Oct-19
Promoters	87.4	87.4	87.4	87.4
Pledged	0	0	0	0
FII/FPI	0.77	1.7	1.99	1.48
Total DII	2.96	3.85	6.62	5.27
Fin.Insts	0	0.1	0.02	1.5
Insurance Co	0.01	0.05	0.07	0.42
MF	1.29	2.05	4.78	1.2
Others DIIs	1.66	1.65	1.75	2.15
Others	8.87	7.05	3.98	5.85
Total	100	100	99.99	100

 

Mahendra Pratap Mall    

      

Chairman & Managing Director     

Annual	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Sales	2,275	1,870	1,466	1,523	1,366
Other Income	78	88	73	56	138
Total Income	2,353	1,958	1,540	1,579	1,505
Total Expenditure	1,600	1,478	1,198	1,245	1,196
EBIT	752	480	341	333	308
Interest	7	2	2	2	0
Tax	216	170	119	116	120
Net Profit	528	308	219	214	188