Indian Railway Catering & Tourism Corporation Limited: history, ownership, mission, how it works & makes money

A Brief History of Indian Railway Catering & Tourism Corporation Limited

Indian Railway Catering & Tourism Corporation Limited (IRCTC) was incorporated on September 27, 1999, under the Companies Act of 1956. It operates under the Ministry of Railways, Government of India. Initially, IRCTC was established to cater to the catering needs of the Indian Railways and also to promote tourism in India.

In the fiscal year 2000-01, IRCTC generated revenue of ₹ 25 crores (approximately USD 3.3 million at the time) and served around 5.6 million passengers with food services.

By 2006, IRCTC had established its first online ticketing portal, revolutionizing the way train tickets were booked in India. The platform received recognition for its user-friendly interface and convenience. In 2016, the portal reported over 5 million tickets booked monthly.

In 2019-20, the company reported an operational income of ₹ 2,190 crores (approximately USD 290 million), driven by an increase in ticket bookings and food services. The net profit for the same fiscal year was ₹ 284 crores (around USD 37.7 million), indicating a healthy profit margin of 12.93%.

In 2020, the pandemic impacted operations significantly, with a reported decline in ticket bookings and catering services. The revenue for Q1 FY 2020-21 fell to ₹ 115 crores, a decrease of 87% compared to the previous year. However, the company quickly adapted, enhancing its online services and implementing safety protocols.

As of 2021, IRCTC has diversified its offerings, introducing food delivery services through its mobile app. The app saw downloads exceed 20 million users by 2022. The company also launched its tourism packages, contributing to a significant uptick in revenue streams.

In the fiscal year 2022-23, IRCTC reported a revenue of ₹ 2,940 crores (approximately USD 394 million), with a net profit of ₹ 530 crores (around USD 70.7 million), reflecting a robust recovery post-pandemic.

As of October 2023, IRCTC has become a market leader in travel and tourism services in India, with a market capitalization exceeding ₹ 53,000 crores (approximately USD 7 billion), and its stock trading on the National Stock Exchange of India (NSE) at around ₹ 700 per share.

A Who Owns Indian Railway Catering & Tourism Corporation Limited

Indian Railway Catering & Tourism Corporation Limited (IRCTC) is a significant player in the railway catering and tourism sector in India. As a public sector enterprise, its ownership is primarily held by the Government of India.

As of the latest financial data, the ownership structure is as follows:

As per the latest quarterly report, IRCTC has shown consistent growth in its revenue, reporting a revenue of approximately ₹2,000 crores in the financial year 2022-2023, reflecting an increase of 34% year-on-year.

The company’s net profit for the same financial year stood at about ₹500 crores, marking a robust growth from the previous year. This highlights the significant contribution of the tourism and catering segments to IRCTC’s overall financial performance.

IRCTC’s stock performance has also been noteworthy. As of October 2023, the share price has been fluctuating around ₹800, with a market capitalization exceeding ₹10,000 crores. The stock has appreciated by approximately 25% over the past year.

The company continues to evolve, introducing new services such as online catering and booking of tourist packages, which are also enhancing its revenue streams and expanding its customer base. The government’s emphasis on privatization and increasing tourism infrastructure is expected to drive further growth for IRCTC.

Overall, the ownership and operational framework of IRCTC situates it as a key contributor to India's Indian Railways, with a robust backing from the government and growing interest from institutional investors.

Indian Railway Catering & Tourism Corporation Limited Mission Statement

Indian Railway Catering & Tourism Corporation Limited (IRCTC) operates under the broader mission to enhance the travel experience of passengers through quality catering services, innovative tourism practices, and superior customer service. This commitment is evident in their various offerings ranging from catering services on trains to online ticketing and travel packages. The mission focuses on leveraging technology to provide seamless services while promoting tourism in India.

IRCTC aims to be the most preferred and trusted entity in providing catering and tourism services. In the financial year 2022-2023, the company reported a total income of ₹2,243 crore, marking a substantial increase compared to ₹1,211 crore in the previous year. The growth trajectory signifies the successful execution of their mission to enhance customer satisfaction and operational efficiency.

In order to fulfill their mission, IRCTC has implemented various technology-driven initiatives. These include the introduction of mobile applications for ticket bookings, catering orders, and travel services, which facilitated over **20 million** transactions in the last fiscal year alone. The company also emphasizes sustainable tourism practices, aiming to promote eco-friendly travel options.

Furthermore, IRCTC is committed to improving the quality of catering services offered on trains. They have introduced a wide range of menu options, accommodating dietary preferences, and ensuring food safety standards. The customer satisfaction index has reportedly increased by **25%**, reflecting the effectiveness of these enhancements.

The ongoing commitment to customer service is evident in their grievance redressal system, which has resolved approximately **95%** of customer complaints within 48 hours. This swift response is vital in maintaining IRCTC's mission of delivering superior customer experience.

As part of its tourism mission, IRCTC has launched several special train services and packaged tours, including heritage tours, adventure tourism, and spiritual journeys. These initiatives have expanded the customer base, with a reported increase in tourism-related revenue by **40%** over the last year.

IRCTC's mission statement reflects its core values of reliability, innovation, and customer-centricity, aiming to position itself as a leader in the catering and tourism industry in India. This strategic approach is crucial as the company navigates the evolving landscape of travel and hospitality, particularly in response to emerging market demands post-pandemic.

How Indian Railway Catering & Tourism Corporation Limited Works

Indian Railway Catering and Tourism Corporation Limited (IRCTC) operates under the Ministry of Railways, Government of India. The company provides catering, tourism, and online ticketing services. As of March 2023, IRCTC reported a revenue of approximately ₹2,364 crore, reflecting a growth of 60.6% compared to the previous fiscal year. The net profit for the same period stood at around ₹757 crore.

IRCTC's primary services can be categorized as follows:

• Catering Services: Catering for meals on trains, at railway stations, and other locations.
• Online Ticketing: Enabling passengers to book train tickets through its website and mobile app.
• Tourism: Offering packaged tours, hotel bookings, and other travel-related services.

In the fiscal year ending March 2023, IRCTC handled approximately 2.5 crore online ticketing transactions. The average number of daily ticket bookings reached around 7.1 lakh tickets.

Financial Performance

Here is a summary of IRCTC's financial performance from FY 2021-22 to FY 2022-23:

IRCTC's stock performance reflects strong investor confidence. As of October 2023, its shares traded at around ₹740, having seen an increase of approximately 45% year-to-date. The company’s market capitalization is around ₹66,000 crore.

Operational Insights

IRCTC has expanded its services significantly in recent years. The digital platform has become a preferred choice for travelers, with over 80% of all ticket bookings now conducted online.

In terms of catering, IRCTC operates around 450 pantry cars, serving millions of meals on trains. The company has also partnered with local food vendors to enhance meal offerings, ensuring quality and freshness.

For tourism, IRCTC reported organizing over 1,000 tour packages in 2022, catering to various demographics including domestic and international travelers.

Challenges and Prospects

Despite its success, IRCTC faces challenges such as competition from private players and the need to maintain service quality. However, the ongoing digitization of railways and increased travel demand post-pandemic are likely to provide growth avenues.

IRCTC continues to explore new segments such as e-catering, providing food items to passengers through an app-based system, which shows potential for future revenue streams.

As per recent reports, IRCTC expects a continued increase in revenues with projections of around ₹2,800 crore in revenue for FY 2023-24, leveraging both tourism and catering segments effectively.

How Indian Railway Catering & Tourism Corporation Limited Makes Money

Indian Railway Catering & Tourism Corporation Limited (IRCTC) generates revenue through multiple streams primarily linked to its catering and tourism services. The company has established itself as a significant player in the Indian railway ecosystem.

One of the primary sources of revenue is through online ticketing. In FY 2022-2023, IRCTC reported a total income of ₹2,750 crore, with ticketing contributing to approximately 66% of the overall revenue. The company processed over 3.5 crore bookings in this fiscal year.

Catering services comprise another integral part of the business. IRCTC has consistently expanded its catering operations on Indian trains and at railway stations. The revenue from catering services stood at around ₹800 crore in FY 2022-2023, driven by an increase in passenger traffic.

In addition to ticketing and catering, tourism services have become a vital revenue stream. In FY 2022-2023, IRCTC's tourism division contributed approximately ₹150 crore. The company has launched several packages for domestic and international travel, which have gained popularity among travelers.

Furthermore, IRCTC has ventured into e-catering services, allowing passengers to order food online from various restaurants. This vertical generated approximately ₹400 crore in revenue during FY 2022-2023.

IRCTC also earns revenue through an array of ancillary services, including advertising, train operations, and the management of railway stations. In FY 2022-2023, the income from these ancillary services reached about ₹500 crore.

The company's focus on digital transformation and technology integration has significantly enhanced its operational efficiency and customer experience. By leveraging data analytics, IRCTC has optimized pricing strategies, increased customer engagement, and improved service delivery.

Moreover, the strategic partnerships with various stakeholders, including food vendors and tour operators, have bolstered its market presence. As of FY 2022-2023, IRCTC operates approximately 2,000 catering units and manages over 1,200 food stalls at railway stations.

IRCTC's financial performance reflects its strong business model. The net profit for FY 2022-2023 was reported at ₹900 crore, showcasing a significant increase compared to previous fiscal years. The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin stood at 40% during this period.

Looking ahead, IRCTC aims to diversify its portfolio further by expanding its tourism offerings and enhancing its e-catering services. This strategic direction is expected to provide new avenues for growth and increased profitability in the coming years.