Indian Railway Catering and Tourism Corporation Ltd (IRCTC) Q2 FY23 Earnings Concall Transcript

Indian Railway Catering and Tourism Corporation Ltd (NSE:IRCTC) Q2 FY23 Earnings Concall dated Nov. 15, 2022

Corporate Participants:

Rajni Hasija — Chairman & Managing Director

Ajit Kumar — Director Finance and CFO

Analysts:

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Jinesh Joshi — Prabhudas Lilladher — Analyst

Akshay Bhor — Citadel — Analyst

Unidentified Participant — — Analyst

Madhuchanda Dey — MC Pro — Analyst

Presentation:

Operator

Ladies and, gentlemen, good day and welcome to the Indian Railway Catering and Tourism Corporation Limited IRCTC Q2 FY ’23 Earnings Conference Call hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and, there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and, over to you Mr. Jain.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Thank you, Pallavi. Good afternoon, everyone. On behalf of Dolat Capital, we welcome you all to the Q2 and half-yearly results for FY ’23 conference call of IRCTC Limited.

I take this opportunity to welcome the management of IRCTC represented by Shrimati Rajni Hasija, who is the MD of the Company; and Mr. Ajit Kumar Ji, who is Director Finance, and CFO of the Company.

And now I would like to hand the conference over to the management to take the proceedings forward. Over to you, please.

Rajni Hasija — Chairman & Managing Director

Thank you, Rahul. At the outset, let me wish you a very warm good evening to everyone, and welcome you all to this con-call of IRCTC for the quarter, which has ended on 30th September. I hope you and your dear ones are in good health and doing good.

Yesterday, the Company had already submitted unaudited financial results for the second quarter and the half yearly for the fiscal year ’23 — 2023, and the same has also been disclosed on both the stock exchanges website too.

I shall give you a brief overview about this financial year post which our Director, Finance who is also the CFO of the company will provide the details of the performance of our business segments, which will be followed by the question-and-answer session.

In the second quarter of financial year ’23, IRCTC business model as again demonstrated the resilence, which has been there in the past for many months. That is the profit after tax surged to INR226 crores which you can say was 42.5% up as compared to quarter of the previous corresponding year. And also the company’s revenue in this quarter has also increased to INR806 crores from INR405 crores as compared to the second quarter of the previous year and this quarter, in the second quarter of our financial year ’23 the revenue that INR806 crores is almost double if you see year-on year basis and on quarter-on-quarter basis if we compare with the previous quarter there is a slight decline due to the lean season, September is a lean season for us, gentlemen. We shall provide more color on the same in a few moments when we would be discussing our segmental performance.

The most important here that the revenue from the second quarter of the financial year ’23 continues to be higher than the quarter revenue, which was in the pre-COVID period and which is very important because as the growth has to be compared with that only. All the business segments, except one had revenue our than the pre-COVID levels. The quarter-over-quarter decline in the consolidated revenue was driven by a factor of 5% where our quarter-over-quarter decline indicating segment was also because of the lean period, which has a corresponding impact on the Rail Neer as well. You would recollect as the catering segment was the driver for quarter-over-quarter revenue growth in the last quarter of the financial year ’22 full and the first quarter of this financial year.

On the positive side, IRCTC has been able to add slightly to EBITDA margin, which has come up to now 37% — 37.8% in the quarter two of the financial year ’23 and an improvement of 20 bps quarter-over quarter. As I shared earlier also. With the headwinds of a pandemic behind us, the travel and hospitality industry now can look forward for a much better fiscal year and beyond. IRCTC business segments can also look up to further improved performance in such industry environment.

I shall now hand over the call to my colleague and our Director, Finance who is also CFO of the company Shri. Ajit Kumar Ji to brief you on the financial and segmental performance of the company. Thank you, very much.

Ajit Kumar — Director Finance and CFO

Good afternoon, everybody, and I hope you and your dear ones are in good health. I shall first give a brief overview of our Q2 FY ’23 results post which we shall have the question-and-answer session.

Q2 FY ’23 revenue saw another quarter — a quarter of a strong improvement on a year-on-year basis. Revenue of INR806 crores almost doubled on a year-over-year basis given the impact of the pandemic in the base quarter. As CMD madam has already mentioned due to the quarter-over-quarter decline in our largest segment that is catering, the consolidated revenue declined by 5.5% on a quarter-on-quarter basis due to lean period, but still remained comfortably above the pre-COVID quarterly run rate.

EBITDA margin for the quarter came at 37.8%, which implies an improvement of 20 bps on a quarter-over-quarter basis. The absolute EBITDA and net profit for Q2 FY ’23 is also comparatively higher than the pre-COVID level.

So now let us come to the business segments of the company, the number one, the Internet Ticketing segment has continued demonstrated resilience and revenue for the quarter and stood at INR300 crores growing by 13.2% year-over-year and largely unchanged quarter-over-quarter. The segment has shown its resilience as regards to profitability with Q2 FY ’23 EBITDA margin coming at 84.2% versus 84.5% quarter-over-quarter and 86.1% year-over-year.

Next is the Catering segment that is after strong growth in the previous two quarters as with slight moderation in Q2 FY ’23 with revenue for the segment coming at INR334 crores lower by only 5% quarter-over quarter, though on year-on-year basis it grew by 4.7 times. Also the revenue for Catering segment is well ahead of quarterly run rate seen pre-COVID. Lower revenue resulted in EBITDA margin moderating which for Q2 FY ’23 came at 10.6% versus 12% quarter-over-quarter and versus a loss on year-on-year basis. Importantly, EBITDA margin for the segment is slightly lower than the 11.1% to like 4% range still in line [Indecipherable] for this FY ’23 [phonetic]. The decrease in revenue was due to less passenger traveled in Q2 due to lean season as compared to quarter 1.

Our next is the Rail Neer, it has seen Q2 FY ’23 revenue come at INR72.1 crores, which implies a decline of 14.2% quarter-over-quarter and a year-over-year growth of 75%. EBITDA margin for the segment came at 7.5% versus 11% quarter-over-quarter and 6.8% year-over-year due to increase in the [Indecipherable] material cost, which is increasing now.

Then the next is a Tourism segment that Q2 FY ’23 revenue comes at INR99.1 crore, which implies a decline of 13.9% quarter-over quarter and a strong growth of 2.6 times on a year-on-year basis. Due to a decline in revenue, the segment saw a marginal loss at EBITDA level as a cost of state is increased as compared to quarter 1 and less passengers traveled in Tejas in lean season as compared to quarter 1.

For Q2 FY ’23, the cash and bank balances company as of the end of the quarter is INR1,900 crores and net-worth of the shareholders also increased from INR2,238 crores — it has decreased from INR1,884 crores as on 31st March 2022, to INR2,238 crores.

Now that brings to the end of the opening remarks. So now we can move to the straight to the question-answer session. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please go ahead.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Yeah. Thanks for the opportunity. I have a question on the Ticketing segment. Is it fair to assume that full migration of with reversal from the reserve [Indecipherable] category has already happened and now the current situation is up into pre-COVID? And in that context, can you share what is the convenience fee and number of tickets booked for the quarter?

Rajni Hasija — Chairman & Managing Director

Yeah. Mr. Jinesh, your question is that if pre-COVID level of the [Indecipherable] travel has been achieved, so, let me tell you in this particular quarter which has ended in the September, the sleeper class now has contributed to 46% and 2S has been nearly 13% average, July, August, September. So the pre-COVID level, although the total number of sleeper class maybe little bit more than the sleeper class of that time because few more numbers have been added. In this quarter the overall percentage ticketing has been almost 82% instead of 81% which is 81.93%.

And you said the convenience fee — can you please repeat your second question please?

Jinesh Joshi — Prabhudas Lilladher — Analyst

What is the convenience fee and number of tickets booked?

Rajni Hasija — Chairman & Managing Director

Okay. In the convenience, the number of ticket booked is nearly — the entire quarter has been INR10 crores, INR10.6 crores. Average is nearly INR3.5 crores I think in each month. So that makes the total of INR10.69 crores with the few crores here and there. So that way.

And then you had asked about the revenue received in this particular quarter from the ticketing segments, convenience fee. In this particular quarter we have got nearly INR200.32 crores which is at par nearly with the what we had achieved in be first quarter. In the first quarter, our revenue was nearly INR207 crores, now it is INR200 crores.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Sure, madam. One last question from my side and that pertains to the Catering business. I think in the last call you had mentioned that you’re servicing approximately 1,003. And out of that roughly 600 is on the TSV side and balance is pantry. So just wanted to understand how big is the potential here especially on the TSV side given the fact that it may not be feasible to have a pantry cars in all the trains which have relatively shorter route. And in that context how should we look at the growth in the Catering business given the fact that we have been some sequential decline this time around?

Rajni Hasija — Chairman & Managing Director

Well, there is no decline. We are happy to note that there is increase in this segment as well as the number of trains is concerned in both the segments. In the I think prepaid trains and the Gatimaan, Tejas [Foreign Speech] put together, the train where we have pantry cars. We have nearly 450 trains. And in the trains and vending where we don’t have a pantry car there no — as of — as on date, 715 trains are there, where IRCTC has been able to place the contract.

And I think merely for the 200 more trains that tender is in the pipeline which is going to be finalized within a week or so. So as well as the number of trains is concerned it is going to be on an incremental side.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Sure, madam. Thank you so much.

Rajni Hasija — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Akshay Bhor from Citadel. Please go ahead.

Akshay Bhor — Citadel — Analyst

Ma’am, thank you for the opportunity and as always congratulations on good set of numbers. I think just just a question — just a follow-up to the previous question. The railway — the Indian Railways provides the 10 day data on passenger traffic, would suggest that October versus last October is about 30% decline or 29% decline on the passenger traffic. I understand this there is an impact of 2S, but just want to understand is the impact of 2S now fully captured in the October data and from hereon whatever the number, absolute number is, we should continue to see that number continuing, which is about 59 crores passengers. Should we — 5 to 9 crore passengers, should we continue with that kind of run rate?

Rajni Hasija — Chairman & Managing Director

Mr. Akshay, I would like to correct you here. So that versus the October data we are not talking about in this financial. We are only talking about the September. There is a clear cut demarcation between the reserve travel and the unreserved travel. In the overall data, which Indian Railways had published for the 10 days contains the unreserved as well.

For IRCTC, as of now, deals with only with the reserved data. So one difference is that. So that cannot be compared with our figures. And moreover our figures is only up to September and there you are talking about the October figure. So I don’t think so that will be an appropriate. It won’t be appropriate to compare both the segments at this juncture because October data I don’t have with me as of now. And in October let me tell you for the reserve segment we have festival movement which is always higher, going to be always higher than the September movement. Maybe in the next con-call for the next quarter if I would be discussing whereas we would be talking about that.

So September is considered as a lean period, which I mentioned in my previous remarks also. October is a festival period, all festivals in the Eastern India, Northern India and the Western India fallen in this period. So we are going to have a good number that is why our average though stood at 82% in the September we may see some variation in the month of October. But still we take only the accumulated figure so more or less it may be come out to be the nearly, little more than the previous average.

Akshay Bhor — Citadel — Analyst

I’m sorry, let me clarify. This is a — so the Railways also provide reserved versus unreserved, right? So we are only talking about the PRS non-suburban data. So my question is that 03 . So my question is that should we assume that from October onwards the full impact of 2S going away will be visible from here on? That’s my question.

Rajni Hasija — Chairman & Managing Director

Gradually it has already started from the previous month also. Earlier we were having nearly 36% to 37%, at that time 39% of the 2S booking but as of now, just now I have informed while answering question of Mr. Vignesh that figure has now reduced to 13% but the overall earning in the convenience fee in that segment has remained the same. Our revenue from the convenience fee has remained the same because in the reserved segment the bookings start 120 days before. The festival gain, which I mentioned in my last, if you recall, [Foreign Speech] last year the con call, which I had for the investors when we had submitted our first quarter result that we are going to be compensated by the volume gains of the festival booking which is going to happen for 120 days before. So that is an impact we got this month and our revenue from the convenience fee is nearly the same, sir.

Akshay Bhor — Citadel — Analyst

Yeah, ma’am. I agree but the question is from here on should we expect that number to be steadily growing or declining?

Rajni Hasija — Chairman & Managing Director

As I have been mentioning that temporary gain has now been adjusted and more or less 13% is more or less, if I see the average of all the three months, July, August, September the figure is nearly 13.2% to 13.1 or 12.75%, like that the average comes out to be 13%. So, more or less it is going to stabilize near here and there.

Akshay Bhor — Citadel — Analyst

Okay okay. And ma’am my second question is on the catering segment, you are obviously well ahead of pre-COVID levels and the revenue is obviously higher than pre-COVID but how to think about margins here, I mean is this, 10% to 12% kind of margin is something that we can work through or because the margins in both catering and Rail Neer still below pre-COVID despite the revenue being higher. Just wanted to understand where do we expect margins to separate.

Rajni Hasija — Chairman & Managing Director

At the outset let me tell you, Akshay Ji, that the margins in the Railneer have been impacted because the petroleum prices have gone up, and because petroleum prices have gone up marginally Nangloi, from where the bottles are manufactured so it has impacted, so we can only gain by volume. Whenever more plants come, we may begin by that and most of the plants which are coming up are on the PPP model where we are going to have very less, nearly negligible expenditures, it’s only the capital we are going to have.

As far as catering is our margins are more or less the rather. If we have — if we are going to have a long-term contract it varies, of five years, there we will get more margin. We are going to be on a positive side in the next few more months to come. So we are going to have a long-term contract instead of a short-term contracts. COVID has almost settled. We are now, we can now plan for a long-term contract on all trains which are in the pipeline. Most of the trains have started, new trains are pouring in, IRCTC has been providing catering in all the trains. Most of the trains 3AC trains have also been taken into the account and all our tenders for the 3AC trains are gradually in the pipeline. 700, nearly 700 we have ordered, 200 in the pipeline, 250 some. So it is a constant step forward.

Operator

Sorry to interrupt ma’am your voice is fluctuating a little bit.

Rajni Hasija — Chairman & Managing Director

Now if it is okay.

Operator

Yes, yes. We were not able to hear the last sentence.

Rajni Hasija — Chairman & Managing Director

I said if the process is going to be continuous addition of trains and with the long-term contracts we may have, we may anticipate some increase in revenue also.

Unidentified Participant — — Analyst

Got it, ma’am. And there is no change in revenue-sharing between you and Indian Railways in catering and Rail Neer segment from the pre-COVID levels, right, that remains the same.

Rajni Hasija — Chairman & Managing Director

No, sir, it remains the same because it is based on an MOU between Indian Railways and IRCTC.

Unidentified Participant — — Analyst

Got it, ma’am. Thank you. Thank you so much.

Operator

Thank you. The next question is from the line of Madhuchanda Dey from MC Pro. Please go ahead.

Madhuchanda Dey — MC Pro — Analyst

Yeah, hi, ma’am. I have two questions. As you mentioned that the profitability will improve as you have more of your own plant in the Rail Neer. If you could just highlight the trajectory of capacity expansion and what kind of revenue should we be expecting in the next couple of years as this process happens? I have a second question which is on the segmental loss in the tourism business. I just wanted to know as you had mentioned in your opening remark about the Tejas train, so, I just wanted to know what contributed to the loss in the quarter in this segment.

Rajni Hasija — Chairman & Managing Director

I enlighten you on this, Madhu Ji. First is the Rail Neer plant, which is capacity augmentation. As of now, we have already opened our Hima plant and Himadri plant all licensing work has been done and the first two bottles there have been produced. We are just refining the quality of the water over there. Once the quality of the water is settled, and because this is a unique kind of plant where we are making water from steam. So it is, I would say, I have to speak NTPC Simhadri. So now as of now in my capacity, IRCTC capacity is to produce 15.52 lakh bottles a day. And our other plants Gustavo, Bhubaneswar are going to be live, this year we have planned this year, this financial year they are going to be live. With this, we would be further adding to capacity of 1 lakh 44 lakh — 1.44 lakh bottles a day. And by the end of ’23 or the beginning of the next fiscal other two plants will also be there in our final commissioning stage, so you can anticipate that our achievement of 18.4 lakh bottles a day would be achieved in the beginning of the next financial year.

Madhuchanda Dey — MC Pro — Analyst

Okay. And that will — that will make you self-sufficient in — to what extent, I mean.

Rajni Hasija — Chairman & Managing Director

We are stopping here. We are going to appoint a consultant, again to review the water requirement because population has also increased and this is based on our data which is two years old. So after that, the things have gone changed, so we are again reviewing the requirement at other locations now.

Madhuchanda Dey — MC Pro — Analyst

Okay. Okay. So further capacity addition is expected.

Rajni Hasija — Chairman & Managing Director

Ji. Ji. And your second question why the tourism segment has shown the losses. Well, September is not a month where one goes out on tourism. Generally, it is a period when there’s a lot of people are fasting and [Indecipherable] happens. So our main chunk is religious tourism. So that did not happen in the month of September. Now we are going to have. In October, we had a very good movement and in November we are also going to have a very good movement, and in Tejas segment also, Tejas, [Foreign Speech] customers movement was less. Although the segment was in profit and overall profit in the half-yearly has been nearly 9.3 crores in the Tejas but since the revenues from the Tejas have been less. So it has impacted the other segment also. Although the occupancy in the Tejas was less in the last two months, in the month of September, in October it has gone up.

Madhuchanda Dey — MC Pro — Analyst

Okay, thank you, ma’am.

Operator

Thank you. [Opeartor Instructions]. The next question is from the line of Ajinkya [Indecipherable] from Metaverse Equity. Please go ahead.

Unidentified Participant — — Analyst

Good afternoon, everyone. So my question is state dependent tourism segments have not performed well during this quarter. So is there, any specific reason for that and increased lease liability and financial lease liability is creating additional burden of financial costs which is impacting the bottom line, so, how management is planning to improve the bottom line?

Rajni Hasija — Chairman & Managing Director

First thing first, state special is not a liability to IRCTC in any manner because these are special trains which we enter once we get the request and most of the state trains are running on a sponsored basis, so the state sponsors that. And in the cold period when everyone, when every state was struggling there was not much activity happening on the welfare side. Now the sales have started in our revenue in this particular segment has gone up. In October you will see we have run 19 trains of Madhya Pradesh which the impact of the same will be seen, in many cases, this is not a time to travel. [Indecipherable], Navarati, so many things are there in September. So 22 days very less travel happened and overall figure also goes down. So state period is not a liability, not any cost, only a pure revenue game for IRCTC.

Unidentified Participant — — Analyst

Okay, okay, thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ian Mehra from Equity Treasurer Capital. Please go ahead.

Unidentified Participant — — Analyst

Good afternoon, ma’am. I have two questions. The first one is, I want to know about the non-convenience fee revenue this quarter and any overall guidance of non-convenience fee revenue for the full year. And my second question is regarding. If you are able to provide any tourism revenue guidance for the whole year?

Rajni Hasija — Chairman & Managing Director

In the, if you will see the total Internet ticketing revenue the revenue is divided into two parts, one is the convenience fee and the other is the non-convenience fee. If I take the half-yearly figure of IRCTC, the total revenue in the half year at least is INR601 crores, 300 in each quarter we can say roughly. So in that 67% of our debt is from the convenience fee and rest 32%, 32 point some percentage is from the non-convenience fee. And out of that, if you see the total non-convenience fee, how much is contributing to the total income of IRCTC into the total percentage, this percentage service charges that we are receiving from the various bank, and nearly 12.5% that we are receiving from the agent. iPay payment gateway is contributing to my total revenue in the Internet ticketing is nearly 5.32% and advertisement is nearly 6% it is contributing. So you can say the major chunk is still with the agent business where 13% is coming from the agent business and iPay is also contributing 6% of the total revenue.

And you wanted to know the roadmap of the tourism. Tourism, all our Rail Tour Packages had been on that track. Our trains are on the track. We have again also started one more segment, Swadesh Darshan. Our trains are running, our FBR operations are on, impact will be seen because FBR operation impact is seen in the next month once we get the entire revenue and state figure, we are running the state figure, we are running the three states as of now Rajasthan train is is flying, Goa it is running, Madhya Pradesh it is going to start again. We operated in the month of October and we operated around 20 trains for Delhi Government up to July. August, September there was no movement from their side, so we are going to operate that also. We are also talking to many states, and Rajasthan is also going to add more. So we are going to have a good amount of our business in this particular segment as the time to come in this financial year.

As far as air ticketing is concerned, yes, we have started gaining in this segment, our segments have improved. Our business around, our budget hotel is also going to improve because new tenders have been decided and two more in the pipeline with the new license fee, in fact, there has been a record collection of license fee in one of the budget hotels which you will come to know very soon once we discuss the results of the next quarter. And all other various categories are also doing fine. Our air package business has gone up and you will find a good improvement in the, in this particular quarter.

Unidentified Participant — — Analyst

Madam, any tourism total revenue guidance for this financial year upcoming 2023?

Rajni Hasija — Chairman & Managing Director

Tourism is a choice business, sir. So it may June to any number or it may be on a very average kind of a side also. Any negative news in the market, for example, as of now, we don’t have any e-visa. It is impacting inbound tourism in the entire country so as our train may also get affected, Maharaja and Golden Chariot. It is tourism is impact of the overall condition of the country any news of the COVID will impact it, any news of pandemic will impact it. So you cannot commit on the tourism business, however, we try to make it as much as we can.

We are going to operate many trains of the state, you might have seen that we have tied up with the Karnataka State Tourism, Karnataka government are also operating their train. That is also there. We are also going to have a tie-up with the other state government for operating their train. So this business we are going to capture new operation.

Unidentified Participant — — Analyst

And any ma’am EBITDA margin which we expect to generate, any target EBITDA margin we have in mind for the tourism segment itself.

Rajni Hasija — Chairman & Managing Director

Tourism is a, I mean, 7% to 8% margin is working in this segment, the margin is less. Here we don’t have any monopoly. We compete with the unorganized sector.

Unidentified Participant — — Analyst

Okay.

Rajni Hasija — Chairman & Managing Director

And it is just like any other tour operator IRCTC is nothing but like any other tour operator. The way other two operators are operating we have to operate in the same manner, same competitive environment, run here and there are make the package success and all that. So the competition is very, very high everyone is doing the business. So what we are doing we are doing our best. We are trying our level best, sir.

Unidentified Participant — — Analyst

In this scenario, we can expect 7% to 8% margin roughly.

Rajni Hasija — Chairman & Managing Director

Yes. Yes. At least. Therefore that segment is not in the losses.

Unidentified Participant — — Analyst

Okay.

Rajni Hasija — Chairman & Managing Director

The impact of COVID is still seen in tourism, it has not gone from tourism but because that is the railway business is a different kind of a business, this is a different kind of a business.

Unidentified Participant — — Analyst

Okay. Thank you.

Unidentified Participant — — Analyst

Thank you. [Operator Instructions] The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Yeah. Hi. Thanks for the opportunity. Firstly, ma’am, I would like to ask about the tourism business. What are the incremental triggers that we see from a growth collection point of view, you already alluded about portal new licenses, I missed that part, and anything from the outbound travel also if you can comment on.

Rajni Hasija — Chairman & Managing Director

The first is the Tejas that is our private train, which contribute — which has contributed nearly 74 crores in the overall revenue of this financial year. October revenue has been announced and we can anticipate that November-December is going to be good if nothing goes wrong in the industry. If our occupancy level increases, we are going to gain out of that. If you see our bus segment, hotel segment, and the retiring rooms segment there also if the passenger number increases, the retiring room segment also increases. And in the hotel, we are going to bring an aggregator, the moment we get an aggregator, our hotel bookings are going to rise. And in the bus, we are doing pretty fine up to October rather we have revenue of nearly, I think so 10 crores or so in the bus alone that to in this financial year and where we have covered 22 states and state transport also, we have tied up individually with state transport also. So that segment is also going to do good. The only segment. I don’t see any negative point in this because now the season for the travel has come, from October to March it is the season when many travel.

For luxury Tourism also, our Maharaja is on the track and still running. Our Golden Chariot will start it’s first operation on 20th of November and all out other, our Deluxe Train is going to be on the track very soon because things are now improving we are also going to operate, revive our Buddhist sector very soon.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Okay and any volume we could give in terms of the air ticketing. What was the base number in the last couple of quarters and what is the run rate right now?

Rajni Hasija — Chairman & Managing Director

I can only give you the segment number. Let me check if I have that figure with me for the year. Just wait, let me see. Segment booked if you see in the month of July, August, and September, I will just read out the segment in each quarter. The segmental, it is month, in the month of July we had booked around one lakh 29 segments, in August we had booked around one lakh 39 segments, and in September we had booked around 160 — one lakh 68,000 segments and we have also increased our convenience fee from INR50 to INR100. So income from booking, gross booking amount as particularly been more and our, I think our, INR5 crore revenue is registered from this particular segment which is a pure revenue. Understand.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right. And secondly on Tejas what is the — what was the revenue utilization, what is the frequency right now and what are the profitability for payment.

Rajni Hasija — Chairman & Managing Director

Frequency, Rahul Ji, has been restored to the previous level. On the day of or holiday, we operated also in the month of October. Our occupancy level in this particular financial year for the Ahemdabad data is nearly 83% and Lucknow Tejas is nearly 73%, 73.9, average of 74%. And overall revenue from both the Tejas up to September ’22 is INR74 crores. Operating expenses have been to the tune of INR64 lakh, INR64.8 lakh and there is a net profit of INR9.3 crores in the Tejas segment. Have we got more passengers in this so that would have been better but let’s see if we can get that business or the next month.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Yeah, sorry, I missed the after revenue you said INR74 crore, I missed the best part.

Rajni Hasija — Chairman & Managing Director

Our operating expenses has been INR64.82 crores, and our net profit from this segment is 9.3 this year.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Okay. And any, of course, there is no new tender or about those trains that were to start privatization but is there any process that we are also initiating from our end to try and switch for more private routes?

Rajni Hasija — Chairman & Managing Director

Sir, as of now, there is no tender of policy from Ministry of Railways. So once they have it, we will certainly inform our investors.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right and ma’am in the catering segment, we were to do the lean period assessment, is that process still pending?

Rajni Hasija — Chairman & Managing Director

Almost completed, Rahul Ji, and we will be impacted this quarter but we will tell them to pay in case there is an increment, wherever the increment is, in the, I think last quarter because we have to give them some time for payment. The impact will be seen in the fourth quarter only. We have completed the process and now we will be initiating the NOCs if required.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

And what number of licensees have been now asked for this revised pricing.

Rajni Hasija — Chairman & Managing Director

It depends on the train, sir. There are few trains there is zero increment has been noticed. Few trains have been seen. Few trains it has been on that, I think decreasing side, also but that is not going to impact us because we are going to charge only the quoted license fee. So loss is not going to be there because we have to just sort it out, but the sale it this point has resulted into. So we’ll have to have a consolidation. We are having consolidation. We will be submitting the result soon.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right right. Okay. So, but as you just said now this has now been identified, and but the revised pricing advantage we may see only in Q4.

Rajni Hasija — Chairman & Managing Director

Depending upon a case-to-case basis, sir. Yes, we will be in Q4.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right. So, can we say that now since most of the business and I think you also mentioned this in your opening remark that most of the business now has seen this complete cycle so as to call it from a COVID and a pricing hike, 2S, all those things are now largely done with and from calendar ’23 onwards we would see a more normalized picture of the business from all the segment?

Rajni Hasija — Chairman & Managing Director

Yes, sir. Hopefully, yes.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right. These things are behind what would be the real growth driver other than the usual passenger traffic growth, which may happen in a year now.

Rajni Hasija — Chairman & Managing Director

As I mentioned that our Rail Neer plant study is, we are going to do it again because we are finding that very soon we are going to have, our production level reaching the optimum level that is around 18.5 lakh bottles — litre bottles a day but we will and we will again do the survey and we’ll find out another opportunity if business is there or not. Then second will be we would like to increase our non-convenience fee resources to the best we can and our commission in the iPay model, our model as you can see iPay alone in this financial year, our business has been to the tune of nearly INR32 crores is the total revenue and INR9.13 crore is the net revenue, net profit to the IRCTC, and that is up to the — up to September. So this figure may go up to, may go up more than INR60 crores or INR70 crores, who knows. So we are trying our level best and our profit in this segment will also go up. So we would be targeting any specific point and then we would also be targeting the state period and other segments. Our election cycles are also are happening this month. So we would have incremental benefits in October, November, December till the time elections are done.

So this will be, we would be gaining. If we are able to get the BSF, for which we have already signed an agreement with them BSF moment traffic, we will gain out of that also because we would be doing that train, half of the train will be covered in the tourism, half of the train will be getting covered in the catering segment. So that gain is also going there. Hopefully, if everything goes right, the company will certainly do good.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right. And the current output, what is the total units produced during this quarter.

Rajni Hasija — Chairman & Managing Director

About the Rail Neer?

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Yes.

Rajni Hasija — Chairman & Managing Director

Capacity utilization has been very good in the month of summer. In the summer, few plants have done as high as 90% but the overall capacity utilization of these plants, sorry, I don’t have figures readily available as of now but before we close, I’ll get you.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Okay. I was just looking.

Rajni Hasija — Chairman & Managing Director

One minute, I got it. 75% nearly is the capacity utilization figure.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

And again.

Rajni Hasija — Chairman & Managing Director

New plant like the Jagiroad plant and new places there was some issue in the water as such, the groundwater level had gone down, so those issues keep coming. All put together 75%. We will increase this further. However, November-December January are bad months for Rail Neer because the requirement goes less. Summer again from February onwards it will pick up, sir.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Right. Right. And on the CapEx side, can you share the CapEx for new office and also the other CapEx that is planned for next year?

Rajni Hasija — Chairman & Managing Director

INR250 crores we have to pay to NBBC for acquiring our office, which we have to pay in a phased manner. Our first two installments have gone. So that CapEx continues to be there as per the plan given by NBCC. Secondly, we have already started giving time for doing our, one is the regular expenditure and the reason for the capital expenditure in the Internet Ticketing and we are going — we are completing our upgradation in the Internet ticketing. So that plan is also on and for that, we had anticipated INR100 crores in the first quarter con-call if you recall out of which we have already spent some amount and some amount is still due which we are going to close very soon.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Okay. And last question from my side. Any specific reason why depreciation charges has gone up from INR13 crore to INR18 crore in this quarter?

Rajni Hasija — Chairman & Managing Director

We have some as per our advice of our auditor, I think this question will be answered by our finance team because they have done that.

Ajit Kumar — Director Finance and CFO

Rahul because this quarter our ROEs increased because of the new leases added in this quarter because of that depreciation has increased.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Sorry, I could not understand, ROE increased for?

Ajit Kumar — Director Finance and CFO

Whatever the lead assets we have accounted as assets of the company, right, as per the accounting standard, so whatever lead charges we have paid to our leads. So we have to account it as assets in the company and accordingly, we have to account for the depression as interest on that. So this is a requirement of the accounting standard actually.

Rahul Jain — Dolat Capital Market Pvt Ltd — Analyst

Okay. That’s it from my side. Thank you so much for all the answers.

Rajni Hasija — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Uday Nagireddy, Individual Investor. Please go ahead.

Unidentified Participant — — Analyst

Yeah. Hi, good evening.

Rajni Hasija — Chairman & Managing Director

Very good evening.

Unidentified Participant — — Analyst

Thanks for allowing my question. My question is about, is there any plan in the future to increase any price hike? I think since a very long-time it is INR15.

Rajni Hasija — Chairman & Managing Director

Well, these deliberations are on in our company. We are doing some cost analysis. So let’s hope for the good. Till the time, it is done, it is not there in the market and we cannot comment on that because these prices are administered prices since the pre-comp prices are going up. It calls for a day, we should recommend to the Ministry for Railways for increasing the price and deliberations in the company is already on. We have already discussed this matter amongst ourselves. So let’s hope for the good.

Unidentified Participant — — Analyst

Okay, thank you. That’s all from me. Thank you.

Operator

Thank you. The next question is from the line of Akshay Bhor from Citadel. Please go ahead.

Akshay Bhor — Citadel — Analyst

Ma’am just wanted to clarify the previous question you’re saying for the Rail Neer if you have to increase prices you have to go through the Ministry of. Railways and hence sort of get an approval from them to increase the prices. Is that correct?

Rajni Hasija — Chairman & Managing Director

We can only deliberate internally and we can only decide whether, what should be done we are deliberating internally in any case, these are either as I have said just now the pricing for the Rail Neer are administered by the Ministry of Railways. So we’ll have to go to the Ministry of Railways to get the approval and decide on price decision.

Akshay Bhor — Citadel — Analyst

And then just to clarify similarly on catering as well if you have to make any changes to the pricing or to the contracts, it has to be approved by the Ministry of Railways.

Rajni Hasija — Chairman & Managing Director

Yes, sir. We have in the from DFR onwards we have been mentioning all of this that our pricing in the catering front in the Rail Neer plant is decided by our Ministry, Railway Ministry, that is Ministry of Railways. It is only a convenience fee. IRCTC has been given the flexibility where the BoD of IRCTC can decide the convenience fee to be charged from the customers.

Akshay Bhor — Citadel — Analyst

Ma’am just one-one last question from my side. We know that all your tickets ultimately get booked on the IRCTC platform but just wanted to know what is the share of third-party initiation of bookings or let’s say somebody initiates a booking on MakeMyTrip, and what is the percentage share of such bookings, which are originating from a third-party website.

Rajni Hasija — Chairman & Managing Director

It would be initiating from third-party websites but finally, it would be coming to me as my B2C partner, right.

Akshay Bhor — Citadel — Analyst

Right, ma’am.

Rajni Hasija — Chairman & Managing Director

But in this B2C partner, our charges are high. And we charge, not in addition to the convenience fee, our convenience fee with is INR15, INR30 in the normal case, and a little concession for the UPI payments, which are still rupees per ticket more from them.

Akshay Bhor — Citadel — Analyst

Just wanted to know what is the rough percentage of such tickets getting booked.

Rajni Hasija — Chairman & Managing Director

It is nearly, I think not more than 25%, 20% should be there.

Akshay Bhor — Citadel — Analyst

Okay. Okay.

Rajni Hasija — Chairman & Managing Director

More or less. I’ll get you the exact figure before we close.

Akshay Bhor — Citadel — Analyst

Okay, ma’am. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of [Indecipherable] Jadeja from Cost Value. Please go ahead.

Unidentified Participant — — Analyst

Thanks for the opportunity. Ma’am, I have one question, I have, two questions. One is we said Internet ticketing pricing is for convenience fee is in our hands. So, I think it’s INR15 and INR30 seems to be very low. When are we likely to revise?

Rajni Hasija — Chairman & Managing Director

Not in the near future, sir. Not in the next six months to come because we have just passed through the bad phase of COVID. And still our efforts should be to maximize our non-convenience fee resources and other resources. Let’s not put more burden on the customers. So in the long-term, can we expect? This is in our Board’s hands. The Board is competent to decide on this matter. So we do have internal deliberations happening in our Board on this issue also but as of now, we are unanimously we are of the opinion that as of now we may pend it for some time and let the industry restore to the maximum.

Unidentified Participant — — Analyst

Okay. Secondly, I wanted.

Rajni Hasija — Chairman & Managing Director

Travel and tourism as I mentioned, in the tourism sector things have not been restored completely. Things are still hanging around. Many people have lost their job, COVID has been very bad as far as the travel and tourism is concerned.

Unidentified Participant — — Analyst

Okay. And we are not charging any convenience fee for UPI payments.

Rajni Hasija — Chairman & Managing Director

No, we do charge. We do charge like our normal convenience is INR15 and INR30, INR15 for the sleeper class, INR30 for the AC class, it is INR10 and INR20 for them.

Unidentified Participant — — Analyst

Okay. And what is the percentage of UPI bookings versus other?

Rajni Hasija — Chairman & Managing Director

33%, 33% is the bookings.

Unidentified Participant — — Analyst

Okay. And my last question is. We had applied.

Rajni Hasija — Chairman & Managing Director

Sorry let me correct, sir, let me correct it is 27% is the booking for that and in the month of August, average is 27% but there has been nearly 33% from, April to September.

Unidentified Participant — — Analyst

Okay. And my last question is we had applied for a license of payment aggregator with RBI. What is the status on that?

Rajni Hasija — Chairman & Managing Director

For that, RBI has asked us to make certain changes in MoA, that has been approved by our esteemed shareholders in the AGM. After that, all documents have now being submitted and a consultant has also been appointed in the matter. So we are pursuing that further. So maybe we may get a good news soon. As soon as we’re done, we’ll inform our investors.

Unidentified Participant — — Analyst

What should be the impact of this on the revenue and margins?

Rajni Hasija — Chairman & Managing Director

I just mentioned in answering one of the questions that iPay is a very good option. See, iPay as of now we are operating only as a PG, we not operating that as an aggregator only in our system because we don’t have a license of that. In the six months, in the six months of this year, we have been able to earn around INR32 crores of revenue out of which INR9.13 crores is the pure profit, and this is the half-yearly figure I have. So nearly in the, if we count the figure to be doubled in the year, so, maybe a little less, we would ending nearly around INR60 crore also and our revenue will be nearly, I think INR15 crore to somewhere INR17 crores to INR18 crores. And this is when we are only the PG but if we have the aggregator, come up as an aggregate on our website alone, and the way we can go outside our website, this is definitely going to add more business, and getting us transactions.

Unidentified Participant — — Analyst

Thank you, ma’am.

Operator

Thank you. As there are no further questions, I now hand the conference over to the management for closing comments.

Rajni Hasija — Chairman & Managing Director

It has been a very thought-provoking session. And our first quarter has been good, our second quarter has been more or less the same with slight changes, with certain segment getting affected. First quarter was very good because we were comparing with the bad time, and the second quarter we are comparing with the good time but if you compare with the quarter of the previous year we have certainly done very nice. So we are hoping that investor will continue to have the same relationship as they have earlier and keep showing their faith in the IRCTC in the times to come. Let’s hope for the good and the wish were very good for the company. With this, I wish you all the best in the days to come. Thank you very much, investors, and just stay with us. Thank you.

Operator

Thank you. On behalf of Dolat Capital that concludes this conference. Thank you for joining us and you may now disconnect your lines.