Navratna Status Will Allow Company & The Board To Take Quicker Decisions: IRCTC | CNBC TV18

Summary

The video features an interview with Mr. Sanjay Kumar J, CMD of IRCTC, discussing the company's recent achievement of being granted Navaratna status by the Indian government. This status enhances IRCTC's financial and operational autonomy, empowering the board of directors to make quicker decisions. The conversation highlights IRCTC’s record-breaking ticket bookings, payment aggregator license, growth in tourism and catering sectors, and partnerships with companies like Swiggy and Zomato. Despite some challenges, such as catering margin dips, IRCTC is optimistic about expanding its services and profitability through strategic planning and partnerships.

Takeaways

• 😀 The Indian government granted Navaratna status to IRCTC, enhancing its financial and operational autonomy.
• 😀 With Navaratna status, IRCTC's board can invest up to 1,000 CR or 15% of the net worth in projects, empowering quicker decision-making.
• 😀 IRCTC's passenger bookings in the fourth quarter have reached record highs, with more than 15 lakh bookings in a single day.
• 😀 The company's performance varies seasonally, with bookings made up to 60 days in advance for different quarters.
• 😀 IRCTC has successfully obtained a payment aggregator license from the RBI, aimed at improving ticketing margins and expanding business opportunities.
• 😀 The company's payment aggregator business is already performing well, with around 22% of total bookings happening through its payment gateway.
• 😀 IRCTC plans to expand its payment gateway operations with an open market license, targeting both government and private agencies.
• 😀 IRCTC’s tourism business saw significant revenue growth, particularly from the Bhart Goro trains, which helped boost third-quarter revenues from 28 CR to 65 CR.
• 😀 In Q2, IRCTC implemented a plan to increase the number of Bhart Goro trains to meet rising demand, with more trains added to their fleet.
• 😀 The catering business faced a margin dip from 15% to 12%, but IRCTC is focusing on improving volume and revenue while maintaining reasonable profit margins.
• 😀 Partnerships with food aggregators like Swiggy and Zomato have contributed to the catering business, with daily meal bookings exceeding one lakh per day.

Q & A

What does it mean for IRCTC to be granted Navaratna status?

Being granted Navaratna status enhances IRCTC's financial and operational autonomy. It allows the board of directors to make quicker decisions and invest up to ₹1,000 crores or 15% of the company's net worth in projects, boosting the company's efficiency and benefiting its investors.

How does the seasonal nature of IRCTC's business impact its performance?

IRCTC's performance varies by quarter due to its seasonal business model. Bookings are typically made 60 days in advance, and performance can differ depending on the time of the year. However, IRCTC achieved a record with over 15 lakh bookings in a single day during this quarter.

How will IRCTC's payment aggregator license improve its business?

The payment aggregator license, once granted by the RBI, will allow IRCTC to expand its payment services beyond its internal customers. It will open up new business opportunities with government and private agencies, helping IRCTC improve ticketing margins and grow its business.

What are IRCTC's current capabilities in the payment gateway sector?

Currently, IRCTC handles approximately 22% of all railway bookings through its own payment gateway. It outperforms many well-known payment aggregators in both web and mobile bookings.

What has been the trend in IRCTC's revenue from tourism services, particularly Bhat Goro trains?

IRCTC has seen significant growth in its tourism services, with revenue from Bhat Goro trains increasing from ₹28 crores in Q3 FY24 to ₹65 crores in Q3 FY25. The company plans to continue expanding this segment in the future.

How does IRCTC plan to restore profitability in its catering business?

IRCTC aims to restore profitability in its catering business by increasing the volume of services and overall revenue. The company focuses on providing reasonable, affordable meals to rail passengers, leveraging new opportunities in the railway sector.

What role does the Dedicated Freight Corridor (DFC) play in IRCTC's future plans?

The DFC is expected to release more capacity for the introduction of new trains, creating additional opportunities for IRCTC. The company is keen on capturing this growing market and benefiting from the increased number of trains.

How are partnerships with companies like Swiggy and Zomato benefiting IRCTC?

IRCTC's partnerships with Swiggy and Zomato have been successful in boosting its e-catering business. Meal bookings have exceeded one lakh per day, helping IRCTC generate additional revenue with reasonable margins of around 15%.

What are the current margins for IRCTC's e-catering services, and how do they compare to the overall catering business?

IRCTC's e-catering services generate a margin of about 15%, which is in line with the company's overall catering business margin. This service has helped increase customer engagement and improve profitability.

What challenges does IRCTC face in its catering business, and how is the company addressing them?

IRCTC has faced a dip in catering margins from 15% to 12%, but the company is addressing this by focusing on increasing service volumes and revenue. It aims to provide reasonably priced meals to passengers while capitalizing on the expanding railway market.