IRCTC Targets 18% Annual Growth in Tourism Revenue, Says CMD
Indian Railway Catering and Tourism Corp (IRCTC) is planning for steady expansion in its tourism and hospitality sectors. This follows a strong performance in the December quarter, where tourism revenue jumped 29% compared to the previous year.
Chairman and Managing Director Sanjay Kumar Jain told NDTV Profit on Monday that the company aims for an annual growth rate of 15% to 18% for this segment.
Key Drivers of Tourism Success
The growth was driven by high demand across several areas. Notable highlights include:
- Bharat Gaurav and State Teerth Trains: Revenue rose by 51%.
- Maharaja Express: The premium train service saw a 39% increase in earnings.
- Budget Hotels and Travel Packages: These segments also saw double-digit growth, helping IRCTC expand its reach in the travel market.
“We are looking to finish the year with around 15% to 18% growth annually,” Jain stated.
Catering Performance and Margins
In the catering segment, profit margins for the quarter dipped to 10%, down from the nine-month average of about 12%. Jain explained that this temporary drop was due to three main factors:
- New Branded Partnerships: The launch of a “proof-of-concept” project with food partners like TajSats, Haldiram, and Mypure.
- Tax Adjustments: Higher GST payments related to approximately ₹70 crore in catering bills for Vande Bharat trains.
- Operational Costs: Increased staffing and overhead expenses required to handle higher sales volumes.
Despite this dip, Jain expects full-year catering margins to remain near 12%.
Expanding “Rail Neer” Production
The Rail Neer packaged water division performed steadily, with better use of its existing facilities. IRCTC recently opened a new plant in Vijayawada and is working to double the capacity at its Danapur and Ambernath units.
The board has also approved four more plants in Manohar, Prayagraj, Bhagalpur, and Ranchi to meet growing market demand.
Future Outlook
Regarding upcoming labor code regulations, Jain noted that IRCTC is currently assessing the financial impact. However, he expressed confidence that the company can meet these new requirements easily, thanks to its growing revenue and high business volume.
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